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Let's get into this episode.I hope you guys enjoy it.
What is up, everybody?Welcome back to Capital University, the number one business podcast in the world.Even if it's not really the number one business podcast in the world, it's number one in our hearts and your hearts as well.
If you guys are watching on YouTube, don't forget to like, comment, subscribe.If you're listening on Apple Podcasts, we greatly appreciate you.Just don't go to the leaderboards and check that we're not actually number one.
Don't forget to rate the podcast five stars.Get us to actually number one, subscribe and leave a review.Pop, we have a very special guest today.
Guys, what's going on?We've got Mark Randolph.He is the co-founder of Netflix.He's the co-founder of Looker and a bunch of other businesses.Basically, this guy is a hits machine.He just builds billion-dollar businesses.
And when you've got a track record like him, you're definitely gonna want to tune in.Before we get into the interview with him though, don't forget to go to Kraken.com.They're sponsored.We're sponsored.We have a sponsor.Bryce has a sponsor.
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So go to kraken.com, kraken.com.If you forgot, go to kraken.com.All right, let's get this episode with Mark.I hope you guys enjoy it.So Mark, maybe let's just start with you kind of explaining your story a little bit.Where'd you grow up?
How did you get into business?And then we'll go from there.
Sure enough, well, I've been an entrepreneur my entire life, even though at the beginning, I didn't even know what an entrepreneur was.I was just compulsively driven to start things.I don't even call them businesses.
You have this crazy idea of some way to make something better and you just do it.It's a hole that has to be filled and pretty much been doing that my entire life.
Doing that when I was a little kid led to doing little side projects in high school, then in college.
Then I had the luck to be part of starting seven businesses, two of which did remarkably well, and allowed me to keep doing it, but by doing it by helping other people rather than having to do it myself.
I'm a guy who probably couldn't keep a regular job, but lucky enough, I stumbled into this one which rewards my ADHD.
For those that don't know, explain what the two companies were.
So the two biggies probably was, Netflix, you guys heard of that one?Not familiar.Yeah, so Netflix certainly was the big hit.
Actually, the cool thing besides the economic success, it was a business I could explain to my mom and have her understand what the hell I was talking about.
Because before that, I was in these mail order companies and what the hell with all that stuff. After Netflix, I left Netflix, wow, almost 15 years ago now.
And I helped a friend start another company, which is called Looker Data, which is a totally different kind of business.It's a business to business business.But we just sold Looker to Google for $2.6 billion.
So just goes to show you can kind of make lightning strike twice if you're lucky.
So speaking of Netflix, I know you just wrote a book about the early days of Netflix.Can you actually kind of give like an example of like when you realized when you were on to something or you're coming on to something big?
Yeah.Well, listen, the book is called That Will Never Work.And I called it That Will Never Work because every single person I pitched this ridiculous idea said the same thing.Investors, employees, like my wife said, that'll never work.
It's because at the beginning, the idea was not, hey, let's do a global streaming company that produces its own content.The idea at the beginning was much simpler, was we were going to rent DVDs by mail. That was how we deliver content.
And everyone said, that's the stupidest thing I've ever heard.But here's the thing, and this is true, not just for Netflix, but I believe true for every idea.It was a bad idea.It didn't work, but it was the starting point.
You know, we tried it, we learned stuff, we did experiments, we began little by little iterating the company.And that's kind of the key, that so many people get an idea in their head and they get fixated on it.
And they think and think and think and think, and everyone tells them that will never work and they stop. and you've just got to start.And the book is that story.
It's how just a handful of us, with no experience in the video business, took an idea that everyone thought wouldn't work and somehow managed, through a lot of scrapes and near-death experiences, managed to create this company which has, in some ways, changed how we all consume television.
Yeah, pretty successful company.You've started over five successful companies.What do you personally look for when you're starting a company?
Interesting problem.I've long since realized it's impossible to tell a good idea from a bad idea.And so for me, it's not about falling in love with the idea.I want to fall in love with the problem because the problem won't go away.
So when I find some interesting thing that needs to get solved, something which is clearly broken, something which is difficult, something which everyone's doing.And I'm saying, why does it have to be that way?
That's the kind of company that I like, because that withstands weeks, days, years of trying different things to make it work.And pretty much every company that I've been involved in starting started off with, this is crazy.
There must be a better way to do this.
So Mark, one of the things that's really interesting about this is Netflix is obviously this big winner.You've had a number of other successful businesses.Looker's a very different type of business.
When you're looking at a business from an investment standpoint, you talked about the problem being interesting.
What do you look for in successful founders or a team in terms of being able to identify which are the teams that are going to be able to solve these interesting problems?
That's a great question.In fact, it is the fundamental question.The idea counts for shit.I mean, it's kind of fun to riff on the idea, but the idea is just the starting point.It is the team.In fact, it is people, people, people.
So I look for a very specific set of things. And I'm looking for this weird blend in a person.I mean, for one, you have to have a predisposition for action.You've got to be the kind of person who thinks less and does more.
I mean, it is a classic story that when Reed Hastings, who's the current CEO of Netflix, and I were commuting back and forth to a different job brainstorming ideas, it popped in our head that maybe this new DVD thing that's launching might be a way to do video rental by mail.
But rather than overthink it, rather than rushing in to write the business plan or work on that pitch deck or try and get on Shark Tank or some bullshit like that, we said, how can we quickly figure out if it's a good idea?
We just turned the car around. that moment went down to town and bought a little, we couldn't buy a DVD, bought a music CD and mailed it to ourselves.But that's the predisposition to action I'm talking about.
The second thing, and these will be quick, the second thing is you've gotta have persistence.
And you've gotta believe that even though everyone's telling you this will never work, even though trial after trial doesn't work, you've gotta have this self-confidence that I am gonna figure this out. But here's the third thing.This is the rarity.
This is the one that I look for, which is, does someone recognize they don't have all the right answers?
Can you combine remarkable self-confidence and persistence with the ability to listen, to know there are other people who are smarter than me, who may have been down this path before?I don't need to do what they say.
I don't need to accept their judgment, but I need to hear it. And that combination of three things, when I find that, I'm whipping out my checkbook.
Great advice there.Are there any crazy stories from Netflix that you've never told anyone before that you're like, this is how close we came to death?
Well, there's certainly not ones that I haven't told before, but there are ones where we came really close to death.I mean, it is almost, I mean, I could have named the, rather than calling the book, that will never work.
You know, I could have called it, wow, we almost died with that one. But the classic ones was we were a subscription business and we had just figured that out.
And subscription businesses are great because it's recurring revenue, but they're terrible because you spend all your money upfront acquiring the customer and then they pay you back over time.And we had finally cracked the code and it was killing it.
I mean, orders were flooding in, but that meant that money was flooding out and that might've been manageable.This was back in the dot-com heyday. until it wasn't.And overnight, there was the dot-com bubble bursting.
And all of a sudden, there was no money to be had.So now we had finally solved the business.We were going, we've got it.And it was incredibly expensive, and we couldn't raise money. And that was the point we said, we're done.
That was the point we said, we've got to sell.And then when Blockbuster wouldn't buy us, even for $50 million, where we really said to each other, we are screwed here.
And that if we're going to make this work, we have to buckle down and solve it ourself.There's no easy way out. But that's part of being an entrepreneur.
And it's funny when you look back, you don't remember the champagne and the parties and you remember those bonding moments when you were trial by fire with your comrades.That's what I mean, I can feel it right now.I'm kind of having a post-traumatic.
not even stress, excitement disorder from remembering what it's like to be faced back against the wall and still fight your way out.
So you left Netflix after six years of being the CEO.How did you know that was like the right time to leave the company?
You're a little younger than me, I think, but you'll see one of the wonderful things, one of the best things that can ever happen to you is you figure out two important things about yourself.
And one is what you're good at, and the other one is what you enjoy doing. And I believe if you can combine those two, you've got it set.And I was lucky.I figured both of those things out pretty early.
And the answer to both of them was early stage companies.I love it.I love the problem solving.I love the teamwork.I love the fact that it's different every day.And a modesty warning, I'm actually pretty good at it.
I've got a really good sense for solving those types of problems.And, you know, Netflix crushed it.We had an IPO, we had money, we had a reputation, we could hire people.And I got to this point where I go, God, I still love this company, but
I don't really necessarily love what I'm doing anymore.Netflix isn't a startup anymore.And you realize that what success is, is freedom.And I could still get what I love.And so I did, I left with zero regrets and staying friends with everybody.
And now I do get that.I do get the chance to every day work with early stage companies, helping them turn these dreams into reality.I get to come to work.I get to sit around the table with the super smart people and solve these cool problems.
But then here's the big bonus is I get to go home at night and then they have to stay up all night solving the problems.
Mark, what's the one thing as we go to wrap up that you wish you knew when you were 21 years old?
You've gotten to have this storied career, built a number of amazing businesses, but what's that one thing that you're like, man, if I had known this at 21, I would have been even more dangerous as an entrepreneur.
It took me a while to trust my judgment about people.One of my early jobs, there was this production manager, the person in charge of all the printing and production.And he was, two ways about it, he was an asshole.
Mean to everybody, just terrible, terrible person.But here's the weird thing, everyone liked him, loved him.They said, hey, Frank, how you doing?Good to see you, Frank.What are you doing this weekend? And I'd go, what is wrong with me?
And then of course, Frank gets fired.And as soon as he's gone, everyone's going, oh my God, what an asshole.And I realized my judgment is sound.
And I wish I had known that much, much earlier in my life to trust that when I send someone's a good person, they're a good person and vice versa.And when you can sort that out, that goes a long way toward having a good life.
That's fantastic advice.Mark, you're an absolute legend, man.Thank you so much for joining us today.Bryce, got any other questions?
I have no questions.Thank you so much for coming on the podcast, my man.Appreciate you.
And listen, if you guys, if anyone out there is struggling with finding the answers to their own business, I've got a podcast coming out called That'll Never Work, where I basically spend 30 minutes riffing just like this, helping people solve their problems.
Mark, on that podcast, people come on and basically tell you the problems and then you try to solve it?
Absolutely.It's basically the same type of mentoring sessions I've been doing for 20 years, where someone comes, sits down and goes, I'm stuck.And it could be they're stuck raising money.
It could be stuck because they're fighting with their co-founder.They're trying to figure out when to give up, what the go-to-market strategy is.
It's all these early stage problems that sometimes having someone who's willing to listen and help you get on the right path can be valuable.
Absolutely.Make sure that everyone goes and checks.That will never work.A podcast, a book, Marks and Legend.Thank you so much for joining us, man.
Oh, it's a pleasure.Thanks guys.Appreciate you, dude.
Thank you guys so much for listening all the way to the end of the podcast.If you guys are listening on Apple podcast, remember, don't forget to rate the podcast five stars, subscribe and leave a review.
If you're watching on YouTube, we greatly appreciate you.Don't forget to like comment, subscribe.We'll see you guys next time with another special guest or by ourselves, whichever you guys prefer, honestly.All right.Peace.
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