Netflix cofounder Marc Randolph's key to success is confidence

And a system for testing bad ideas.
Published February 22

TAMPA — Netflix’s big meeting with Blockbuster was a dud. After months of trying to pin down a face-to-face with executives of the then-movie rental giant, Marc Randolph, cofounder of Netflix, knew it was over when the room laughed at Netflix's $50 million self-valuation. So he took a long, quiet ride back to the airport.

“I distinctly remember being on the plane with my head down thinking, ‘Now we’re going to have to kick their a--,’” Randolph said.

That confidence, he said, is the one attribute above all else that makes entrepreneurs successful. Speaking to a packed room of University of South Florida business students and entrepreneurs on Thursday, Randolph kicked off the second installment of the university’s Muma College of Business “Thought Leader” series.

Success for Randolph wasn’t a meteor that fell out of the sky and hit him, he said. It was a process rooted in confidence.

“I’m not a glass-half-full optimist,” he said. “I’m a glass-overflowing optimist.”

Optimism, paired with a healthy tolerance for risk and an idea is Randolph’s formula for entrepreneurial success. It’s what kicked off Netflix and many of the other ventures that he had a hand in starting or funding.

Netflix, he said, came from a pile of ideas. He and Reed Hastings, who would become Netflix’s other cofounder, were in the market for a new idea they could collaborate on, and spit-balled while they carpooled to work each day.

After workshopping more than 100 ideas, they settled on testing video rental by mail.

“It’s not about having good ideas,” Randolph said. “It’s about building a system and a process and a culture to come and test bad ideas.”

And testing them cheaply. One of the startups that Randolph funded was a company that delivered beer to customers' doors. To figure out if the product was going to be in demand, the founder, who was in college at the time, passed out cards before the weekend that said, "Need beer? Call me."

Several iterations of delivering beer to students and friends, then businesses and then to homes eventually resulted in the startup EasyFridge.

Lean in to a problem you find, he said.

"Learn that problem," Randolph said. "Know that problem, and believe that you're the person who can solve it."

Contact Malena Carollo at [email protected] or (727) 892-2249. Follow @malenacarollo.

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