We’re often advised to follow our dreams, but we rarely receive any guidance about how to do that. Netflix co-founder Marc Randolph launched that now-famous company from an unlikely dream into what was to become, two decades later, a more than $100 billion corporation. He used his entrepreneurial experience and skills to help build Netflix during its first six years, and now he mines the lessons learned from that experience to help others identify their dreams and improve their odds of success. Randolph believes that people can use similar skills in their business and personal lives.
Bottom Line Personal asked Randolph, who has a new book out called That Will Never Work, to explain how—even if you’re not in business—you are an entrepreneur in your own life. This means learning how to originate ideas, manage people, set culture and solve problems.
Stop waiting for a great idea to arrive, and try to transform a bad idea instead. Whether you’re searching for a life-changing business idea or deciding how to remodel your kitchen, a great idea is unlikely to pop into your mind.
That’s because bolt-from-the-blue great ideas are very rare. Even good ideas are uncommon if you expect them to appear as fully formed “Eureka!” moments. The secret of great ideas is that the majority of them initially arrive as bad ideas—but rather than toss them aside, someone took the time to mold those bad ideas into good ones.
Example: The original idea that became Netflix was VHS movie rentals by mail. That was a bad idea—VHS tapes were too expensive to ship. When lightweight, less-expensive-to-ship DVDs appeared, we shifted our attention to those but renting them one-by-one was a bad idea, too—people hated waiting days between movies. Netflix movie rentals didn’t catch on until we tried the no-late-fee, send-one-DVD-back-and-receive-another-automatically-from-your-queue subscription program.
This applies in your personal life, too. You may have an idea for a new adventure that you want to pursue…but don’t give up on the idea just because at first it doesn’t seem to work. Example: You try playing an unfamiliar sport, but you are much worse than everyone else on the field. Instead of giving up, you switch leagues to one that has more novices. In other words, you don’t abandon the idea…you modify it.
Get ideas out of your head and into the real world as soon as possible. People are fearful of moving ahead with ideas until they are “fully formed.” It feels safer to mull and fiddle with an idea because as long as an idea exists only in the mind, there’s no financial downside or risk of looking foolish if it doesn’t pan out. But it’s a bad strategy.
The problem is that people inevitably expand on their initial ideas, adding detail after detail, entirely in their imaginations. Every detail increases the odds that some component won’t work…and the larger the idea grows, the more its sheer size is likely to seem prohibitive.
Instead, seek simple, inexpensive ways to test ideas as soon as possible. Not only do these tests improve the odds that the idea will continue to move toward success, they also imbue the project with a sense of reality and momentum that it would lack if it remained entirely between your ears.
Example: We mailed ourselves a compact disc to find out whether it could be shipped safely, quickly and affordably. The total cost of this experiment was around $10—one used CD, one envelope and one first-class stamp. It arrived, and our vague concept became a legitimate idea.
Similarly, if you are considering retiring abroad, plan vacations to locations where you think you might like to live, rather than wait until “one day” to jump in and potentially make a bad decision based on pictures online.
Never let low-hanging fruit distract you from your main goals. When is a success not a success? When it’s a small success that diverts your attention from a more important goal. Identify your priorities, in business and in life, then think very carefully before doing anything that would pull you away from these priorities, even if that means skipping things that are likely to work.
Example: When Netflix started to have some early success in the US, we realized it almost certainly would be just as successful in Canada if we expanded into that market. It looked like an easy win…but we didn’t do it. The Canadian market was about one-tenth the size of the US market. It was more important to focus our time and attention on our main market than make a move that would boost our revenue by only 10%. At Netflix, we came to call this avoid-even-profitable-distractions philosophy “The Canada Principle.”
In our personal lives, we might conclude that there’s an upside to getting elected to a neighborhood association board, but is that upside sizable enough to justify the hours being on the board will require? If you think your life would improve only marginally, then those hours are probably better spent elsewhere.
Let the question, What’s going to go wrong? propel you forward, not halt your progress. Since I was young, I have spent a great deal of time in nature, hiking and mountain climbing. To avoid disaster in the wild or when up high on mountains, it isn’t enough to be prepared for what you expect to encounter—you have to consider what could go wrong and have alternate options already in mind in case it does. There’s always something that could go wrong, and it can be tempting to view these potential problems as an excuse to discontinue the attempt. Instead, when you think of what could go wrong, ask the follow-up question, And what might I do when that happens?
This follow-up question transforms pessimism into a productive problem-solving session. Not only does this build confidence rather than undercut it, it helps shape contingency plans that could come in handy later.
Spending to impress won’t impress anyone. Silicon Valley is full of companies with koi ponds in their lobbies and fully stocked fridges and hot tubs for their generously paid employees. But if you spent time around those fridges, koi ponds and hot tubs, you’d be surprised how often you hear highly paid employees grousing about their employers.
Businesses attract employees with high salaries and lavish workplace perks, but the employees they attract that way are there only for the salaries and perks, not because they enjoy the work or believe in the company. The same is true in your personal life—you might attract or impress some people by driving an expensive car or wearing a pricey watch, but are the people you impress that way really the people you want around you?
Example: Netflix’s first office was in a bland office park, and we spent less than $1,000 furnishing it. Our chairs were from a dining room set I’d had in storage. Our employees were paid much less than they could have earned elsewhere, but they believed in what we were building together. We ended up with a wonderful, loyal team that truly cared about achieving our goal.
You can set the culture in your family and among your friends just as you do at work. The secret to setting a culture in business and in life is that what you do is far more important than what you say or think. Most corporations have written statements about the company’s lofty ethics and purpose, just as most individuals tell themselves they strive for positive goals such as fairness and honesty. But our words and thoughts almost inevitably mean less than our actions. At Netflix, we didn’t just say we empowered our employees…we truly trusted the people we hired to make smart decisions, and that didn’t just apply to high-level employees. Even the receptionist wasn’t given rules for how to behave at the company’s front desk. His job description simply said, “Put the best face forward for the company”—and he did a wonderful job.
At home: If you want to encourage your circle of friends to be more supportive of one another, don’t tell them this. Instead, start being more supportive. There’s a good chance that others in the group will respond in kind…and even if they don’t, your attitude might draw other supportive people to you until you find yourself part of a new circle.