Business ideas are easy to brainstorm. Improving the way people do things and seeing an idea through to fruition is hard. More difficult is believing that your idea is worthy enough to risk starting a new company.How a company makes it from conception to prominence is what Netflix co-founder Mark Randolph reveals in his book: “That Will Never Work”. His story begins on a daily carpool with his friend and co-worker Reed Hastings. Their daily ritual included brainstorming new business concepts that pop into their heads. Things are getting a bit stressful for Randolph who will soon be out of a job as Hastings is selling the tech company Randolph works for.Randolph is never short on ideas which he numbers and tracks in a notebook. His brainstorms, include personalized shampoo, dog food, and baseball bats. Some ideas are vetted, others are quickly shot down. One day Randolph floats a service that could mail movie videos direct to consumers without charging fees. The thought strikes a chord with Hastings who fears telling his wife about $40 in late fees he owes at a local video store. The conversation continues. Both agree that Randolph should form a company to pursue the concept and Hastings will initially fund it.It should be made clear that this isn’t exactly a rags-to-riches story. The two Netflix co-founders worked in California’s Silicon Valley for several years, understanding the nuances of pitching a concept, garnering investment money, and building a business to scale.When Netflix begins in 1997 and the company begins to hire employees, there are few movie DVDs available. Popular movie videos are mostly available in a bulky to mail VHS format. More importantly, DVD players are still in their infancy and Netflix is gambling on a customer rental model that has yet to form.As customers slowly adapt to the virtual video store concept. Netflix is selling more (but less profitable) videos than it is renting them, while wasting money on coupon deals with the major manufacturers that sell DVD players. It’s only after an experimental subscription model gains traction that the company shows promise.This chicken before the egg puzzle makes up the compelling portion of “That Will Never Work”. Randolph is candid with recounting how the company struggles to keep afloat while it waits for consumer behavior to catch up with Netflix’s perceived potential. The world slowly adapts but at the eleventh hour, the California tech bubble bursts and Randolph and Hastings fear that it’s too late.With Netflix close to insolvency, one of the book’s strangest twists is a long anticipated meeting with the then juggernaut Blockbuster Video. Randolph and Hastings pitch the idea of Blockbuster purchasing Netflix for $50 million. Blockbuster almost laughs the assembled Netflix team out of the room. Months later the subscription rental model finally catches fire and Netflix has the last laugh.Told as an entertaining first-person narrative, Randolph’s behind the scenes anecdotes reveal his strengths and also his blind spots. As he looks back at the evolution of Netflix, he points to instances where the company almost collapsed, giving major credit to his staff and their determination to always rebound from adversity. Oh, and that interesting title: “That Will Never Work”? It was Randolph’s wife’s response when he first told her about his Netflix brainstorm.
