There is almost no Israeli who does not have a subscription - or at least a connection to someone else's subscription (until Netflix blocks it) - to the world's largest video streaming service.
But not many know the story of the company, which started as a "lean" competitor of Blockbuster for movie rentals.
We used Claude to summarize "Exceptions - Netflix and the Culture of Reinvention", the book by the company's founder Reid Hastings and Erin Meyer, a lecturer in business administration at the INSEAD college near Paris.
The book offers an inside look at Netflix's innovative and unusual work culture.
Hastings and Mayer start from the year 2000, when Netflix was a young startup, and stood in front of the video rental giant Blockbuster, and describes how the giant brand failed even though it thought it was ready for the Internet age, while the tiny company became a powerhouse.
They attribute its success to pioneering leadership, built on "freedom and responsibility" instead of traditional corporate bureaucracy.
Hastings recounts how a $40 fine for being late in returning a videotape of the movie "Apollo 13" to a Blockbuster VCR inspired his vision for Netflix.
From the start, he sought to foster an adaptable environment without strict hierarchies, approving spending requests immediately with notes that read "Beware the clicks!"
This foundation of trust, transparency, independent decision-making, and little criticism has continued as Netflix has grown rapidly, while maintaining its start-up energy.
The book describes the pillars of the cultural framework, including generous maternity leaves, open Q&As with managers and the "retention test," which evaluates high performance over mistakes.
Managers were instructed to give "relationship, not control" to their subordinates, in order to empower employees' decisions for the benefit of customers and the company.
Hastings on the background of a poster of Kevin Spacey in "House of Cards", photo: AFP
While the high-risk model contributed to missteps like Qwikster (Hastings' announcement in 2011 to split Netflix services so that subscribers would have to pay separate subscription fees for renting movies on DVD and watching movies over the network. The move sparked outrage, leading to the abandonment of nearly a million subscribers and sent the company's stock to a two-year low), it also drove innovations in the streaming media industry, personalized recommendations and award-winning original content that came from independent teams that independently selected projects.
Hastings still receives a pile of resignations at the end of each quarter, thanks to the opportunity for employees to leave the company on favorable terms.
"Exceptional" shows how Netflix has maintained constant growth for years, thanks to nurturing talent and reducing constraints.
However, since the release of the book in 2020, the company has gone through several upheavals, which apparently weakened this culture a bit, and forced the management to recognize that it is no longer a young startup that can perform fast navigations.
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