That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea

Marc Randolph did not arrive at the Netflix idea in a flash of isolated genius. He already had a history of small businesses that never took off: personalized shampoo by mail, custom dog food, and other similar ideas. None of them made a fortune, but each attempt taught him to test cheaply before betting everything on a single idea.

That detail changes the moral of the story. The book does not sell the fantasy of the entrepreneur who gets it right the first time, it sells the opposite: the value of failing fast and cheap several times until one idea is left that solves a real problem for real people. Randolph came up with ideas all the time, and most of them, he admits himself, were bad.

The question running through the book is not what the genius idea was, but how someone who collected small failures ended up founding a company that changed how the world watches movies. The answer starts well before the first DVD went out in the mail.

Randolph met Reed Hastings at work, at a software company called Pure Atria, where the two were colleagues. Hastings had just sold that company for a sum large enough to make him an investor and leave him time to think about the next step. The two lived near each other and started carpooling to work.

It was on that daily commute, stuck in California traffic, that the pair began tossing business ideas back and forth, just to pass the time. Randolph brought his usual flood of wild ideas; Hastings brought a more analytical mind, questioning numbers and market size.

That detail explains a lot about the partnership that followed. It was not a meeting of geniuses at a whiteboard; it was a carpool conversation repeated week after week, until one idea survived the hard questions Hastings insisted on asking.

Before arriving at DVDs, the pair went through a long list of ideas for selling personalized things by mail: custom baseball bats, personal care products, even bicycles assembled for the buyer. The logic was always the same: use the still-new internet to sell what a physical store could not customize.

The idea of selling videotapes, the VHS that dominated the rental stores of the time, also came across the table and was quickly dropped. The tape was too big, heavy, and fragile to survive shipping, and the cost of postage for each one made the math impossible.

It was only when the DVD began to appear in the United States, in 1997, that the list gained a serious candidate: a small, round, light object that might fit in an ordinary envelope without breaking along the way.