No Rules Rules

LESSON 1: Netflix over the years

Hastings outlines his experience dating back to the late 1990s, when Netflix, a start-up he co-founded, was just a provider for DVD-by mail. Both the founders planned to sell the company to the then industry giant, Blockbuster, who outrightly refused the deal. Over the decade, Netflix crushed Blockbuster, and emerged as one of the most successful companies in the entertainment industry. On one hand, Netflix was producing its own TV shows and films, whereas Blockbuster on the other hand, filed for bankruptcy.

However, this victory was not miraculously achieved. It was meticulously planned over the years. The traces of the acclaimed Netflix culture can be observed during the Dot-com crisis in the 2000s, when the company was forced to lay off one-third of its workforce in order to survive. It was at this juncture when they realised that their company was performing better, despite lesser numbers of staff. This laid the foundational philosophy of the company. 

Hastings also talks about his first start-up, Pure Software, and describes the lessons he learnt, and  the disappointments he experienced there, along with challenges faced at Netflix, especially on the cultural front. Furthermore, he explains that the failure of Pure Software was attributed to the complex rules and procedures. This helped him to develop simple but coherent policies for Netflix.   

LESSON 2: Netflix and its pioneering philosophy

The tremendous success of Netflix is attributed to its innovative culture. According to Hastings, efficiency and innovation might not necessarily go hand in hand. It implies that, although efficiency might increase considerably, it cannot be inferred that it is leading to innovation. His idea of innovation is not the same as the industry standard, which promotes a safe atmosphere for improvement. In spite of constant criticism on its unconventional perspective about employees and rule free environment, Netflix has managed to be at the top. 

Meyer on the other hand, finds the Netflix culture pretty uncommon. In her opinion, a company’s culture was rated upon its resemblance to the industry giants. But there came a point when these giants faced a downturn, and so did the values they propagated. But Meyer argues that the Netflix culture is partially hostile, primarily because it seems unusual. Although she is not very convinced about the working methodology of Netflix, Meyer is astonished by the survival story of the company. In the course of time, Netflix has emerged as a successful firm, in spite of four revolutionary changes in its business environment. 

Hastings elaborates on how firms from