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This skill made Netflix worth $289 billion

Hard work isn’t what makes companies into household names, says Netflix co-founder Marc Randolph.

Successful CEOs and entrepreneurs often get ahead because they have a single skill: the ability to prioritize which issues need solutions first, Randolph said during a podcast episode of “The Diary of a CEO with Steven Bartlett” earlier this month.

“I think hard work leading to success is a myth,” he said. “If I can be really smart about which problems I choose to focus on, [that] will make the difference. I don’t have to get everything right, because most things don’t make a difference. Some things do.”

At Netflix, Randolph used to “argue over every word of copy” and every photograph on consumer-facing products, he said — desperate to make sure everything was perfect before a customer saw it, he said.

Over time, he realized that customer reactions had little to do with the amount of polish on a new idea, and that his goal should’ve been to get real-life feedback on imperfect, half-finished tests as quickly as possible, he added.

“If it had even a inkling of being a good idea, no matter how bad the test was, it shown through,” said Randolph. “Customers would immediately perk their heads up.”

One of those tests was Netflix’s subscription model, which eliminated the need for late fees on DVD rentals. Customers responded positively to the simpler, less-stressed user experience — a simple fix that helped grow Netflix’s customer base, putting it on the path to its current market value of $289.29 billion.

Posted on August 20, 2024