Reed Hastings, Chairman and Co-Founder of Netflix

Summary

Netflixの共同創設者であるリード・ヘイスティングスがスタンフォード大学で講演し、起業家としての旅、Netflixの文化と戦略、そして将来のビジョンについて語りました。彼は、学生時代の挑戦や初期の起業体験から学んだ教訓、Netflixが直面した困難とそれを乗り越えた方法、そして企業文化とリーダーシップの重要性について深く掘り下げました。また、AIやゲーム、教育への影響など、テクノロジーがエンターテインメント業界に与える影響についても議論しました。ヘイスティングスは、変化し続ける世界で成功するためには、常に学び、適応し、革新することの重要性を強調しました。

Takeaways

• 🎓 リード・ヘイスティングスはスタンフォード大学でコンピュータサイエンスの修士号を取得し、ビジネススクールにも興味を持っていた。
• 🚀 ネットフリックスの創設者として、彼は常に創造的なプロジェクトに取り組んできた。例えば、学生時代には「フットマウス」の開発を試みた。
• 📈 初期の起業経験であるPure Softwareでの学びは、ネットフリックスの文化と組織構築に役立った。
• 🌐 ネットフリックスは、最初から顧客に焦点を当て、DVDレンタルからストリーミングサービスへと進化していった。
• 💡 2011年のDVDとストリーミングサービスの分離は、過度に先進的な決断であり、大きな反発を受けたが、それでも同社はこの挑戦から学び成長した。
• 🔑 ネットフリックスの文化は「自由と責任」に基づいており、これは企業の成功に不可欠な要素である。
• 📚 経営者にとって重要なのは、適切なタイミングで積極的かつ慎重に行動するバランスを見つけることである。
• 🌟 企業は従業員の個々の貢献を評価し、適切なパフォーマンスが見られない場合は、寛大な退職金パッケージを提供する。
• 🚀 AIとイマーシブ技術は、クリエイティブな作品の作成を強化し、新しい物語の形を生み出す可能性を秘めている。
• 🌍 リード・ヘイスティングスは、教育とフィランソロピーへの強い関心を持ち、技術と資本を使って社会的影響を与えようとしている。

Q & A

ネットフリックスの成功の秘訣は何ですか?

ネットフリックスの成功の秘訣は、お客様のニーズに常に注目し、エンターテインメントに徹底的に集中していることです。リードは創業当初からストリーミングを見据えてDVDを利用したビジネスモデルを構築しました。また、徹底したパフォーマンス重視の企業文化を作り上げ、社員が最大限の能力を発揮できる環境を整えています。

2011年のDVDとストリーミングの分割について教訓は何ですか?

2011年にDVDとストリーミングのサービスを分割した際、市場や顧客の理解が足りずに進め過ぎたことで大きな痛手を被りました。新規事業に過度に傾注しすぎるあまり、既存顧客を手放すリスクに気づかなかったことが教訓です。急速な変化に適応する柔軟性とバランス感覚が欠けていたと反省しています。

ネットフリックスの企業文化の独自性とは何ですか?

ネットフリックスの企業文化の最大の特徴は「フリーダム&リスポンシビリティ」です。十分な成果を出せない社員は手厚い退職金とともに退職してもらうという方針を打ち出し、プロスポーツのような高パフォーマンス志向の文化を築き上げています。家族的な絆よりも成果を重視する点が革新的でした。

テック企業がDEI(ダイバーシティ、エクイティ、インクルージョン)への投資を削減していることについて見解は?

マイノリティや女性の地位向上が緒に就いたさなかにDEIへの逆風が吹いていることは残念です。ただ、インクルージョンと公平な機会は資本主義と自由の理想を象徴しており、テック企業はこうした価値観を共有していると信じています。黒人への抑圧の深刻さを多くの人が理解しておらず、黒人の卓越した業績を讃えることがカギとなります。

ストリーミング競合他社を破る戦略は?

ゲーム業界大手よりも高い創造性を発揮できるオリジナルコンテンツを提供し続けることが鍵です。ハリウッドの映画スタジオや英HBOに匹敵するキャラクター造形能力を磨き、視聴者に次回作を待ち望ませることができなければなりません。

AIがエンタメ業界に与える影響とは?

AIは物語創作を加速させるツールとなるでしょう。自社AI開発力がディズニーや競合他社より高ければ有利になりますが、コミュニケーション重視のエンタメ特性上、革新的な影響は少ないと予想しています。

取締役会長就任後の新たな人生について教えてください

会長としてNetflixの業績監視に注力する一方で、最大の関心事は非営利団体を通じた教育支援とアフリカの経済成長です。ビル・ゲイツのように技術革新で開発途上国の福祉向上に貢献したいと考えています。

ネットフリックスが提供するコンテンツの社会的影響への取り組みは?

Netflixは完全にエンターテイメントに徹しており、教育的価値や社会的影響の拡大には注力しておりません。Duolingoのような教育ゲームは関心事ですが、エンタメ領域とは切り離して独立した取り組みが必要だと考えています。

VR/ARの将来性についての見方は?

VR/ARは孤立感が強く交流性に乏しいので、共有体験を楽しむエンタメ需要にはそぐわない面が大きいです。他者とのつながりを模倣できれば可能性が広がりますが、ストーリーテリングへの影響は限定的だと思われます。

Outlines

00:00

😀リード・ヘイスティングスのスタンフォードへの帰還

このパラグラフでは、Netflixの創設者であるリード・ヘイスティングスがスタンフォード大学での対話について語っています。彼は大学時代にGSB(経営大学院)にも関心があったものの、入学できなかった経験を笑い話として紹介します。その後、Netflixがどのようにして彼のキャリアにおいて重要な役割を果たすようになったかについて軽く触れています。特に、GSBの学生がNetflixの人気番組「Squid Game」のパロディを制作したことに触れ、ヘイスティングスはこの創造性を高く評価しています。

05:02

😅Netflix創立前の苦闘と学び

リード・ヘイスティングスは、自身の最初の起業であるPure Softwareでの経験を振り返ります。彼は、過去の挑戦がどのようにしてNetflixの成功につながったかを語ります。特に、ビジネスと組織運営における初期の苦闘から多くを学んだと強調し、それがNetflixの文化と経営における違いを生み出す原動力となったことを示しています。

10:02

😂Netflixの文化と責任感

ヘイスティングスはNetflixの独特な企業文化について語り、特に「自由と責任」のデッキがどのようにして注意を引いたかを解説します。彼はNetflixが高いパフォーマンスを求めるスポーツチームのような組織を目指していること、そしてそれがどのようにして従業員の選抜と維持に影響を与えるかを詳述します。

15:02

😊Netflixの戦略と学び

このパラグラフでは、Netflixが直面した挑戦と学びについて話しています。特に、DVD事業からの移行、2011年の価格改定の失敗、そしてそれらの経験から得た教訓に焦点を当てています。ヘイスティングスは、過去の決断がどのように現在の成功につながったかを説明し、失敗から学ぶ重要性を強調しています。

20:02

😲NetflixのゲームとAIへの展望

リード・ヘイスティングスはNetflixの将来の方向性について語り、特にゲーミング分野への進出とAIの活用についての見解を示します。彼は、これらの技術がエンターテインメント業界でどのような役割を果たすか、そしてNetflixがこれらの新たな挑戦にどのように対応していくかについての考えを共有しています。

25:03

🤔Netflixのリーダーシップとフィランソロピー

ヘイスティングスは、Netflixの共同CEOモデルの成功と、自身の慈善活動への関与について詳しく語ります。彼は、教育とアフリカの経済発展に焦点を当てたフィランソロピーの取り組みを紹介し、ビジネスの成功を社会貢献につなげる重要性を強調しています。

Keywords

💡エンターテインメント

Netflixの主なミッションは顧客を楽しませるエンターテインメントを提供することです。ヘイスティングスは、ほとんどの人が生計のために働いていると指摘し、仕事後にはリラックスと余暇が必要だと述べています。Netflixの仕事は、世界中の人々にエンターテインメントを提供することだと主張しています。

💡文化

Netflixは従業員文化の構築にとても注力しています。ヘイスティングスは、家族ではなくチームとして組織されるべきだと主張しています。また、スポーツチームのように毎年仕事を争う必要があると述べています。Netflixの文化はパフォーマンス重視で公平で思いやりがあることを目指しています。

💡AI

ヘイスティングスは、AIがエンターテインメントコンテンツの作成を加速させると予測しています。ただし、AIが人間に取って代わることは当面ないとしています。NetflixはAIをフォトショップのようなツールとして利用し、物語やゲームのプロトタイピングに使用しています。

💡ゲーム

Netflixはゲーム分野にも進出しています。ヘイスティングスは、ゲームもコンテンツ制作に膨大な初期投資が必要であると指摘しています。Netflixのクリエイティブな選択が鍵で、純粋なゲーム会社との勝負になると述べています。

💡ユーザー生成コンテンツ

ヘイスティングスは、YouTubeやTikTokなどのユーザー生成コンテンツの台頭がNetflixにとっての脅威になり得ると指摘しています。若者がそちらのコンテンツに移行することでNetflixのシェアが奪われる可能性があるとしています。

💡多様性

ヘイスティングスは、企業が多様性、公平性、インクルージョンを推進する努力を続ける必要があると主張しています。人種や性別などの側面でより公平な機会を実現することが重要だと述べています。

💡気候変動

ヘイスティングスは、気候変動への対応は科学的な解決策があるとしています。太陽光パネルや原子力融合などの技術革新で克服できる問題だと考えているようです。

💡フィランソロピー

会長就任後、ヘイスティングスはアフリカの経済発展や米国のチャータースクール支援など、フィランソロピーに注力していると述べています。ビル・ゲイツのようになりたいとしています。

💡共同CEO

ヘイスティングスは、自分とテッド・サランドスが18年間も一緒に働いており、信頼関係があるからこそ共同CEOモデルが機能していると述べています。ただし、これは特殊なケースで、必ずしも一般化できるものではないとしています。

💡希望

ヘイスティングスによると、希望は人間行動の大きな原動力です。未来のリーダーには経済成長以外にも社会的課題の解決に希望を持つことが重要だと述べています。

Highlights

Reed Hastings reflects on his time at Stanford and his early aspirations of joining the GSB.

The creation of a Netflix-inspired show by the GSB is humorously discussed.

Hastings shares his entrepreneurial journey starting from junior high school, highlighting early ventures like selling cinnamon sticks.

Discussion on Hastings' realization of the importance of selling and creating things from his early projects.

Hastings talks about his first company, Pure Software, and the learning experiences from its challenges.

Insights into the evolution of Netflix from a DVD rental service to a streaming giant.

Hastings discusses the significant decision to separate DVD and streaming services at Netflix and the lessons learned.

The development and importance of Netflix's unique culture, focusing on freedom and responsibility.

Introduction of the 'keeper test' by Netflix to ensure high-performance teams.

Hastings demonstrates how to respectfully let an employee go, emphasizing empathy and directness.

The discussion on Netflix's approach to handling layoffs and maintaining a culture of high performance.

Hastings touches on Netflix's responsibility to entertain and the challenge of balancing storytelling with social values.

Insights into the potential impact of AI on creativity and content creation at Netflix.

Netflix's venture into gaming and the strategy to become a leading creative gaming studio.

Hastings reflects on leadership, the co-CEO model at Netflix, and the importance of trust and relationship building.

Discussion on the importance of philanthropy, diversity, equity, and inclusion in Hastings' life post-Netflix.

Transcripts

[MUSIC]

Reed, welcome back to Stanford.

>> I'm excited.

>> We are so excited to have you

here at the GSB.

Actually, I heard a rumor that when

you were here pursuing your

master's in computer science, you

also tried to enroll at the GSB.

What happened. >> Lonely engineer.

>> [LAUGH] >> Yeah, I got a degree

in computer science and I was

fascinated by what you guys have

here and at the time you had an

ability to cross list occasionally.

But I did not make the cut and so

I've always had this aspirational

relationship where I want to come

back through now I kind of along

halfway.

>> Well, turns out the joke's on

us because people at the GSB really

just want to be in a Netflix show.

>> That's true.

No one could tell them that I was

going to be a media executive.

>> Exactly. >> It was easy to say.

>> Yeah, but I mean it.

I mean, so much so, we actually put

together our very own version

of one of Netflix's biggest hit.

Can we show you the preview?

>> Yeah, let's here it.

>> All right, let's do it.

>> There's a pitch.

>> [LAUGH] [SOUND] >> At a school,

where the only achievement greater

than becoming a founder is joining

a VC that funds founders

A secret society of free market

fanatics.

>> A green triangle.

>> Has devised the ultimate

competition that will push them to

their limits.

>> Get downstairs.

>> Eight MBAs are chosen to face

off against each other in a series

of challenges.

>> Student two is the market big

enough?

>> I didn't do any reading.

>> But only one can walk away with

the grand prize,

a big tech offer in a cold job

market from trauma dumping.

>> Right, I do have a job.

[SOUND] >> To calendar blocking.

>> Five minutes are not to

establish an authentic relationship

via Coffee Chat >> Only one can

reach the view from the top.

Welcome to the Stanford game.

[MUSIC]

>> Which of you will change lives,

change organizations, and

change the world.

>> [APPLAUSE] >> Okay,

bravo GSB, you took the indictment

of inequality and

you turned it into your own anthem.

Totally get it, brilliant.

>> My gosh.

Well, Reed, thank you for

indulging us.

That was a lot of fun to watch and

to watch you watch.

But in all seriousness read it has

been so incredibly inspiring to see

what you've built with Netflix and

I know that's only part of

your story.

So let's start a little

bit earlier.

When did you know you wanted to be

an entrepreneur?

>> Probably junior high school,

selling cinnamon sticks.

You'd take toothpicks and

soak them in cinnamon oil and

sell them for a nickel a piece.

So it was those kinds of

experiences that made me want to

create things.

And only later did I realize you

have to sell them,

but that was early on.

>> Okay, was that a unique

experience or did that kind of

happen throughout your early life?

>> No, I would say I'd say I was

always doing little projects,

most of which ended up being

non-commercial.

But as an example, when I was here

at Stanford, so this is mid 80s.

And back then, you had a keyboard

and a computer and a mouse.

And you'd have to take your hand

off this to use the terminal and

like it slows you down a lot doing

this and I realized, my god,

there's a big market and

the foot mouse, and you could kind

of do this and control it.

>> [LAUGH] >> And

I almost dropped out of school to

pursue the foot mouse.

And I got a mechanical engineering

student here to help design it and

everything and

I was totally committed, this thing

was going to be a monster.

>> [LAUGH] >> But

it turns out that A,

your leg cramps, and B,

it's very dirty environment.

And so

after two days it's gross as heck.

And it was a terrible idea,

but I was equally committed to that

terrible idea as I was to Netflix.

>> Okay.

>> So always` ahead discerning not

so much.

>> Okay, that sounds painful, but

ultimately fruitful in other ways.

So you started before we get to

Netflix, you started your first

company Pure Software.

>> Yeah. >> What were some of

the early lessons you learned from

that experience that helped prepare

you to start Netflix?

>> So, Pure Software was

a technical company,

we did C and C++ programming tools.

And I would say I only had one gear

which is working hard so

I had no sophistication.

And so anytime things got hard,

I would just try to work harder and

I was programming all night trying

to be CEO during the day,

looked and smelled like shit.

But I didn't know any way other

than that to cope with the stress.

And it was the products were

excellent and

the sales doubled every year, but

we replaced the head of sales every

year for five years in a row for

an enterprise software company.

It was like a disaster.

We could have been so much more.

But I honestly just didn't know

anything about business or

organizations.

And so, I would concentrate on

product and trying to do that.

And ultimately, we bought a bunch

of companies, Morgan Stanley took

us public, in the day of 1995 it

was a big success, but

it could have been so much more.

And so, I learned a ton of lessons

of doing things wrong and again,

fortunately we had amazing enough

products that the company continued

to grow despite the internal chaos.

But the lessons I learned is why we

spent so much time and

culture on Netflix wanting to be

different then the first company.

>> We will get to culture don't you

worry about that.

But, I guess let's transition to

how Netflix came to be not

necessarily the full story, but

some of the things that happened

early on.

So Netflix starts in 1997 and

from the beginning you were hyper

focused on the customer,

how did you know, or figure out,

what your customer actually wanted,

especially as their needs evolved.

>> Well in in 97 Amazon was off and

running, and it was clear that they

were likely to dominate buying and

selling of things.

But rental was a two-way logistics,

because you had to return,

in those days, the VHS cassette.

And so I was looking at this as

Pure Software had been acquired.

So I had some money and some time.

So looking for a set of ideas, and

then a friend told me about DVD,

which was very small, and

you could mail it for one stamp.

And so that turned into our digital

distribution network because it's

five gigabytes of data and

you could mail it overnight.

And so it was really built around

the idea of streaming eventually,

we knew the internet was

getting Getting faster and faster.

But it was going to take some time,

and DVD was a temporary device,

which is why we name the company

Netflix, Internet movies,

rather than DVD by mail.com.

It was like the pets.com,

it was the thing of that day.

So always thinking about eventually

getting to streaming.

>> Sure, and

there was a unique moment where you

had some challenges in 2011

when you thought about the decision

point between DVDs and streaming.

So for those who don't know,

you made the decision to separate

DVD and streaming services, and

there was some pushback.

At the time, your stock dropped

pretty significantly, customers

canceled their subscriptions

because prices doubled.

So what did you

learn from that decision?

>> So to set some context,

we were a DVD by mail business.

In 2002, we went public..

Blockbuster attacked us as they

should, they were a little bit

late, [COUGH] but

we really were executing well.

They eventually declared

bankruptcy, first Chapter 9 and

then, wonderfully, Chapter 7, and

that was in 2009.

So we're full of steam energy.

We're getting into streaming,

we're opening up new countries,

we're running ahead, and

we realized, my God, this DVD thing

is going to hold us back.

We had been thinking about

streaming for 15 years, okay,

since starting in 97.

This was our moment and

we were going to be the one.

If you think of all management

teams, how many are too cautious at

preserving the current business and

how many are too aggressive at

pushing into the new business?

Well, obviously,

everyone's too conservative.

So we realized we had to be so

aggressive that it should make

the hair on the back of our

neck stand up, okay?

because human nature is

conservative, and

most very good management

teams were too conservative.

So the most radical thing we

could think of was to dump

the DVD business.

And it was 80% of our consumption

because the Internet was so

slow back then and we didn't

have streaming to the television.

There was a number of limiters.

But we came up with this idea, and

we knew it was going to be

difficult, because we cared about

the customers, we could see that,

but we thought it was still

the right thing to do.

[COUGH] And now there's a good test

case where a management team was

too aggressive about leaning into

the future, and that was us.

So we leaned in.

And you're right that most

customers did not care about

streaming, did not have streaming,

couldn't watch it on

the television.

And so it was just too early.

>> Yeah.

>> And ultimately,

the idea basically worked, which is

Netflix became streaming and

DVD shrunk year by year by year.

But we overcorrected and

we were overconfident.

We had had all these battles and

various things and naysayers.

And so when you've had a lot of

naysayers, and

then you were proven right,

then the next round of naysaying

comes in, and you're like,

whatever, we've seen this before.

And this time, it was too much, and

it was traumatic.

It felt roughly like you're

driving, and

you get distracted reading a text,

and you crash, and your kid in

the backseat's in the hospital.

The kid being the company,

it wasn't dead, but

it was severely wounded.

Our stock was down 75%,

we had our first big layoffs.

It was everything that was horrible

guilt, that should be, of,

again, trying to learn the lessons

that most management teams are too

conservative, so therefore, we

knew we had to push it to the edge.

>> So it sounds like something you

might have done differently is

really understanding the balance

of when to be a little bit

more conservative versus not.

>> You'd love to say you could do

everything right, but

I would say the same aggressiveness

that made us take on Blockbuster,

figure out these things,

got us into streaming,

got us into original content.

That aggressiveness, part and

parcel of it was you're going

to go too hard some of the time.

So you just want to make sure you

have a balance sheet and a board of

directors that can handle that.

So I don't think it's a fair, sure,

I wish we could have

not made that mistake.

Think of it like, then we would've

won the Olympics and

stuck the landing, okay?

And we didn't stick the landing.

>> Yeah. >> Okay, but

we got through it and we won.

And so one of the big things we

had to do was not overcorrect.

The company and employees and

the shareholders were traumatized,

so we did have to go a little bit

more cautious in the short term.

But pretty quickly, we got back to,

this is our play to run and

we've gotta run it.

And I think that was the right

strategy, even though it means that

occasionally you're going to make

an egregious mistake because

you're moving so fast.

>> Mm-hm, yeah,

that makes a lot of sense.

And I mean, it's clear that it all

worked out okay.

>> Yeah.

>> Thankfully,

looking at where we are now.

Many of us here aspire to lead and

build companies like Netflix.

And one of the most differentiated

elements of Netflix is its culture,

to your earlier point.

Very early on, you put together

a deck for your entire company

called Freedom and Responsibility,

and it caught a lot of attention.

How did you come up with this

unique culture?

>> I think everyone in this room is

pretty dedicated to excellence and

to creating an amazing set

of teammates to then go build some

business.

So I don't think it really wasn't

uncommon, it's that we were early

in labeling it and

saying, team, not family, okay?

And saying, no, specifically,

you should organize around this

idea that everyone has to fight for

their job every year,

like it is in professional sports.

And in professional sports,

if you're going to

win the Stanley Cup, it's because

you've assembled the most amazing

group of hockey players that have

ever been together.

And viewing our task in building

organizations like a championship

team.

And for 10,000 years,

the primary organizational unit of

society has been family, okay,

all the way through kings and

companies and family companies.

So, so many assumptions we have

are built around this 10,000 years

of human history where

organizations and

families are the same thing, okay?

And it's only this patina of

corporations, and that's a thin

layer over that that's different.

And so we were the first ones to

just lay it out there,

to say adequate performance

gets a generous severance package.

So 15 years ago, that was

a shocking statement to make, okay?

And so then I think the deck

really, which, again, is true

in professional sports, right?

So we were just the first ones to

say it up front,

that I think made the difference.

>> So when you initially set it up

front, it sounds like you

did get a lot of pushback.

What were some of the initial

reactions, I mean, that people had

when you first put this out there?

>> I mean,

we humans value things in our kids.

So, for example, we value loyalty.

And you would hate to see your

kids be disloyal, okay, and

it's a really human value.

And so what does it mean that

someone's working hard, but

isn't very effective?

What does it mean to push them out?

Is that a immoral or

a disloyal act?

So those were some of the tensions.

And we have to get people

to not judge us like a family.

In a family,

you look after your siblings,

your parents, your kids,

no matter what.

They go to jail, they do whatever,

right, you're with them, okay?

And then we have to recognize

that's one sphere that's very

important to us of relationship.

Then there's another sphere,

which is the workplace.

And many workplaces

are family businesses.

And that's That's fine, sometimes

they're as dysfunctional as Ozark.

It's like okay, but again there's

nothing wrong with it.

We just want to be a different kind

of organization one whose primary

value was excellence and

we wanted to be honest and fair and

inclusive and thoughtful about

how that got applied, but

it was really around performance.

And again I think a lot of

firms are already doing this,

we were just direct in stating it.

>> Yes, and

one of the examples of this direct

culture is the keeper test.

So you have this keeper test that

managers use, why don't you

tell us a little bit about it.

>> It's pretty straightforward,

which is we had managers think

through would they fight to

keep someone if that employee of

theirs was thinking of leaving.

And if they didn't pass this keeper

test we suggested giving

them a severance package now.

And trying to draw a new card of

someone that you really

would fight to keep.

So ultimately,

it's a manager's judgement.

We didn't have them like score

people or rank people.

It's a manager's judgement on what

they fight to keep this person

because of what they added to

the company >> Okay, so I

understand that there's this keeper

test and that adequate performance

gets a great severance package, but

firing someone in a respectful way

can be really hard.

So I would love to just kind of

workshop this with

you quickly if we can.

If I were the person you needed to

let go, can you demonstrate for

the audience how you'd fire me?

>> [APPLAUSE]

>> Can I hire you instead?

>> [LAUGH] >> [COUGH] Let's think,

okay, what job do you have?

>> Okay, I'm the vice president of

content strategy.

>> Okay,

I'll do a little bit shorter

version for the time.

But Katie, I can see that you're

really working hard and trying to

make a big difference here.

If I'm really honest with you,

if you quit to go somewhere else,

I wouldn't try to change your mind.

And the reason that is, is because

of this type of thing, the people

that you've been hiring, it'd give

you maybe a minute of detail.

>> Okay.

>> So enough that you can feel like

there's something there, but

not like a club beating up,

I'll call that a minute.

And say, this is really hard for

you, Katie.

I understand that, but

my commitment to the company is

that if I wouldn't go to change

your mind, then I have to give

you a severance package.

And the severance package is this,

it's relatively generous, typically

like nine months of compensation

these days, so it's a lot much.

And if you think about person X or

Y, that are no longer at Netflix,

we all have great relationships

with them.

And it's kind of like

a professional sports team, where

it really sucks to get cut from

the team but it's not an ethical

judgment or moral judgment or

judgment of you as a person.

>> Okay, wow.

>> [LAUGH] >> Thank you, okay.

>> [APPLAUSE] >> At least in my

theory, what we're trying to do is

get away from you suck.

>> Yeah.

>> Okay, and

like you're a great person in this

particular situation.

I'm being honest as opposed to

being hurtful.

So one of the hardest things is to

get managers to do the job,

which is why we ended up doing big

severance packages.

The severance package is a bribe to

the manager to get the job done,

because managers almost by

definition, like people.

They're good people people.

So they really don't like

firing people.

But if there's a generous severance

package then it's not so bad.

It's certainly that helps too on

the person being let go.

But again the subtle part is it's

tricky in your firm to get managers

to apply the keeper test.

>> Yeah, it felt very empathetic,

but also direct, and

I could imagine how the severance

package really helps with that.

Do you have a perspective on,

a lot of people have said it should

always be very concise,

straight to the point.

Do you have a perspective on, like,

in general,

how long these conversations

should typically last or

if there are other things you may

avoid in conversations like these?

>> It depends on how much of

a surprise it is and almost always

it is a surprise because the person

will have some protective layer,

where the manager thinks

they've given lots of hints and,

but the person is still surprised.

And then it takes probably five or

10 minutes and then it's time to

let them absorb for a little while

and then they'll come back the next

day with questions about okay.

If I had done this contract versus

this, or if I had done that,

they're sort of trying to

understand it more.

But I would say for

the initial communication,

pretty short is good.

>> Okay, very helpful.

Well, thank you so much for

that demonstration, Reed.

I think just even looking

at today's climate,

layoffs in tech are on the rise.

And so it's really important for

us as future leaders to

know both how to hire well and

also how to fire well, so really

appreciate that demonstration.

Let's give a round of applause.

>> [APPLAUSE] >> It's also so

great to tell stories of

people who were let go and

then change the industry.

Mike Bloomberg is probably one of

the best known of that.

Got pushed out of Salma brothers

and then formed Bloomberg.

So right in the same industry.

And so

the more it's socialized with

all of you as if it was in sport.

Well, it's where it's not as much

of a life kind of thing,

it's a performance kind of thing at

that situation, the better.

>> Okay, very helpful.

And you actually have released your

book on culture, No Rules Rules,

Netflix and

the Culture of Reinvention.

Now that you've kind of had a look

back at what this culture has been

and you've continued to have it

happen in Netflix.

You've talked a lot about

what's worked,

is there anything that didn't?

>> I don't think we talked enough

about love.

I think that great teams,

the players love each other and

are warm and embracing.

And so it came across, as very

narrow and judgmental, as opposed

to kind of very loving and caring.

And so

if I were to find a shorthand that

I think would work even better,

it would be big hearted champions,

who pick up the trash.

So the big hearted is coz we want

to be around people who

are generous of spirit and

have a big heart.

And they do all kinds of things for

people all the time.

And a champion is someone who's

going to do the discipline to

become great at their field and

demands excellence, okay?

Someone who doesn't just want

to pass through life,

but wants to achieve something.

And then who picks up the trash

is the whole thing about

responsibility.

So in your house you pick up

the trash, in a public restroom,

in a city you don't.

And where do you want

to define the workplace?

And we want to be in a workplace

where you feel a strong sense of

responsibility.

And so of course, narrowly you pick

up a piece of trash, but

more broadly you do the right thing

even when no one's looking.

That you're the kind of

person who does that, and

that shifts the expectations.

So again, if I were starting from

scratch, it would be Big hearted

champions who pick up the trash.

And I think if you can get people

who aspire to that, you'll be able

to build a very strong and

resilient organization.

>> It sounds like there's just so

much power in working with people

who have those same values and

who are willing to do what

others won't, essentially.

>> That's right.

>> Yeah.

Well Reed, I know we only scratched

the surface on culture.

There's so

much more we could have gotten to.

But I do want to talk a little bit

about the future.

So as a global company, the stories

that Netflix chooses to share

will have an impact everywhere.

How do you think about that

responsibility when deciding

which stories to tell?

>> Our primary responsibility is to

our customers to entertain them.

I mean, for you guys life is great,

but as you well know most people

work because they need the money

and they get done with work and

they kind of just want to unwind

and relax, okay?

And our job is to provide the whole

world entertainment.

And we take that responsibility

very seriously.

And that's the biggest

Northstar we have.

And about four years ago we

had a big controversy with

Dave Chappelle and

some of his humor feels very

threatening to trans people.

And from their point of view he's

an evil force to oversimplify.

And from his point of view he's

a truth teller poking fun at

things which is what comedians do.

And that was very splitting in

the company because we had not yet

really clarified our priorities.

But through that exercise of

the various protests,

we solidified that we need to build

employees who are proud that we

entertain very effectively, and not

to make them think that every show

was a reflection of our values.

And so that was tumultuous at

the time, but we got to a good

place, where we can really focus on

incredible entertainment,

as the main aspect of what we do,

and not about does this reflect our

values.

So for example in a show there

might be a lot of gunplay or

a lot of n-word or a lot of other

things that doesn't mean that those

things because they're on the show,

are okay in the office, okay?

Shows and

films are often explorations of

fantasies both positive and

negative in all kinds of ways and

people are able to separate them.

I remember when

my kids were growing up and

they were playing the first person

shooter video games.

And I thought, my god,

this is like ninth grade,

they're going to turn into killers.

And they're not.

And it's kind of amazing how we

humans are able to separate that

intense fiction or

fantasy from reality.

>> So when you all were in this

tumultuous place, it sounds like

you've got this you recognize your

values, you recognize,

you as Netflix what your stance is,

how did you get to that?

>> Yeah, a lot of long, painful

tearful, we had made a real point

of recruiting trans employees and

being trans-friendly.

This is 2015 to 2019, roughly.

And we're proud of it and

were amazing employees.

And they felt as a whole that we

had promised Shangri-La and

now we were betraying them.

So there was an intense sense of

betrayal amongst this group of

employees and their allies, and

the other thing I think is that we

had really built up ally ship and

that's an important aspect of being

a good ally but what it can lead to

is not thinking for yourself.

Either it's a litmus test you're

an ally with today it would be your

Palestinian or Jewish friends.

And if again, if you're required

to be an ally to one or

the other of them it can force

a lot of divisions.

So I think we should have always

set it up as people thinking for

themselves and being able

to tolerate descent internally.

But again, we and the culture were

going through a lot at that time

and again, I think we came out in a

good place, which is really focused

on the entertainment value and

you asked about the process of it.

Each situation is different and so

I think,

it's a lot of discussion and

dialogue and that was an important

tool in it and

really, my successor, I've got two

successors, Greg and Ted.

But Ted really led in that

discussion and he was really

grounded in the artistic values and

was so literate in places that

artists had been suppressed, and

later, to everyone's regret.

>> So another force that is shaping

the stories we tell is AI.

AI, you studied it,

it's very big now.

Maybe always has been some would

say maybe not.

But years ago when you were asked

who is Netflix's biggest

competition, you famously

joked that it was sleep.

Now, it's been a little bit

different, most notably other

streaming services.

But just last week open AI launched

their very first video model Surah,

is AI generated content

an existential threat

to your business.

>> Well AI will help us

be more creative, okay?

And so we'll be able to produce

more shows using those tools.

So again, it's an authoring

essentially accelerant.

If it means that Disney does

a better job at us because they do

better at AI than we do,

then sure there would be a shift

in competitive strength.

So we're super focused in

the company about using AI and

all these aggressive scenarios

as you would expect to tell better

stories.

So, that's the kind of

big evolution of it.

Now in the long term, to the degree

that AI replaces humanity, and

then we're entertaining AIs instead

of you, there are some big changes.

>> Sure. >> Okay, but

they're sort of beyond the scope of

our corporate planning.

And so we tend to use AI as just

like a better Photoshop and

trying to create movies,

especially prototyping.

We haven't used it really in final

production at this point, but

it's pretty incredible

at the prototyping level to be able

to imagine the scenes.

>> Do you see yourself using

it in the final production stage?

>> Yeah, absolutely, and

all the low level tasks will

get transformed.

And in general, whether this is

the legal field or in the legal

field first it's the parent

first its search like LexisNexis.

And then it's the paralegals, and

then it's the first year attorneys,

or junior partners and

eventually AI is coming from

the senior partner.

>> Right. [LAUGH] >> Think of it as

moving up the stack as it gets more

sophisticated.

And it's the same thing,

we've had a lot of people who draw

animation and that's one of

the first areas that gets hit and

then it moves up the stack and more

and more creative areas as we and

others can use those tools for

better entertainment.

>> Another trend in media and

entertainment right now is gaming.

Gaming is a $200 billion industry

and is getting more and

more of consumer time.

Other production companies

have tried to enter the space and

have failed.

So what that is

Netflix making on Gaming,

and how do you think you'll win?

>> Yeah, we started in film,

expanded to television, now we're

big in television, big in film.

And we've got about three years

in on our gaming effort.

And we have to be the most creative

gaming studio that produces games

that everyone is dying to play and

interact with.

And we're getting little pockets of

success in that, but not yet

something equivalent of The Crown

or something like that.

So we're continuing to work on it.

Gaming, like series and films,

you have to put 50 to 500 million

in up front to do an incredible

production job, and then you

release it to a lot of people, and

then there's a community around it.

So it's got very similar attributes

to film and television.

So it'll take us a couple of years

to build up that DNA of what type

of creative choices,

how do we make those, and how do we

win against pure gaming companies?

But again, in the same way in

the old world there was film

studios and television studios, and

they were distinct.

And for us, it's all creativity.

I'm confident we'll be able to

do that.

The challenge that we do worry

about is user-generated content, so

YouTube and TikTok.

So to the degree that you all and

your kids eventually all are happy

with YouTube and TikTok,

there's less time to watch Netflix.

So it is entertainment,

it's incredibly addictive.

Our storytelling is more measured,

built up, and

it's a different rhythm.

And again, your taste and

the next generation's taste, if

they shift towards user-generated

content, that's a threat.

And what we have to do is really

lead on the professional content

and continue to raise

the bar on that so that part of

your entertainment every month is

Netflix, whether it's film, series,

or gaming.

And so that's why

we're investing so much there.

>> Yeah, hearing you talk about

this, it's just so fascinating

seeing how much has changed since

you first served as CEO of Netflix.

You've served as CEO for

over two decades, and

toward the end of that journey, Ted

Sarandos joined you as your co-CEO.

Now it's Ted and

Greg Peters in those roles.

Fewer than ten companies in the

Fortune 500 have a co-CEO model.

So how did it work for you and

what should we think about as we

build our own models of leadership?

>> Yeah, I would say it's not

a general technique that I'm out

pitching.

I would say if you've got two

people that have worked together

for 18 years now,

it's a high performance technique.

And then they work so

well together and they can leverage

each other's strengths.

But if I think of the next 100

years of Netflix, there may be only

twice when it's a co-CEO model.

>> Sure. >> So it's not like we've

discovered something magical and

this is the way to go.

It's optimization for

two very unique people who trust

each other deeply and

have complementary skill sets.

So it's fantastic for us.

But it's like one recipe in

a recipe book,

it's not the general model.

>> Sure, how do you- >> I will say

that it's probably selection bias.

But if you look in S&P over

the last 50 years, those companies

with co-CEOs considerably

outperform all other companies.

But I think that's because only

healthy the companies dare do it.

>> Yeah. [LAUGH] >> Okay, so,

again, it's a selection bias more

than it is a driver, or

there's no way to separate those.

>> Sure, how do you cultivate that

trust relationship?

I'd imagine it's something similar

with a co-founder relationship.

How do you actually build

that trust?

>> You have to earn it.

You have to set a culture where

people are very candid but

also caring.

You don't want to be candid and

cruel because it shuts down human

interactions.

You want to be candid and caring.

And so we spend a lot of time

on going through issues,

and may not be quite as intensive

in learning some about your

touchy-feely course and the rate of

affairs that it generated.

So it does seem to have some tricky

aspects.

So what we do is maybe similar but

damped down a little bit.

Or maybe we're older compared to

you guys when you take

those things.

But you really do want to create

a lot of intimacy at work.

You want people to really care for

each other, in some cases,

to love each other, but

to have that accelerate learning

and trust, rather than

have it become obsessive where your

whole life is there.

>> Sure, so really,

really valuing that relationship,

showing up with intimacy, showing

up with care, it sounds like is one

way to build that trust.

>> Yeah.

>> So something you care a lot

about, in addition to cultivating

those relationships and culture,

is your philanthropic work.

And one of the areas you've

invested a lot in is diversity,

equity, and inclusion.

Recently, we've sort of seen this

big blowback on DEI.

So specifically, big tech companies

are cutting funding for DEI teams.

We've seen less investment

in underrepresented founders.

It feels like just as

underrepresented minorities and

women were sort of starting to

have headway,

we're now facing a blocker.

From your perspective, what's going

on, and what do we do about it?

>> I think if you look over

the last 100 years of civil rights,

there was a lot of people saying

to black Americans, yeah, we agree

with your goals, but wait, you're

going too fast, this kind of thing.

And it's awfully irritating when

you feel the burden of

discrimination to be told, wait,

we're moving too fast,

that kind of thing.

I do think that companies

rushed into, post George Floyd,

into doing something because they

genuinely cared.

And there is some blowback on DEI,

for sure, but I think the general

idea of inclusion and giving

everybody a fair shot has been

the aspirational side of America.

And frankly, of capitalism and

of freedom, and so it gets us all

excited to work on achieving that

dream, which we know for

most groups is not fully there.

But there's a lot of commitment

to making the meritocracy work,

as opposed to abandoning

the meritocracy,

which would be the hard edge.

But I do think that not many

Americans really understand

anti-blackness, which is separate

and distinct and worse than most of

the other exclusion classes.

And you guys are all capitalists,

so you would understand that

morality often follows prophets.

And so if you think of manifest

destiny and this idea that

European Americans should take over

all of the continental US because

it was our destiny, right, this

whole philosophy grew because it

empowered people to take over land.

And what happened is a Portuguese

figured out sailing in the 1400s

and could get to Africa and to US

and Brazil, and they discovered a

very rich source of profits, which

is trading in black bodies, and

capturing them and selling them.

And to do that,

you had to brand them and

you had to buy them and sell them.

And this was like,

Morally difficult, because they

were clearly human beings, so

they invented this idea that black

people were subhuman, and

because of that it was morally

acceptable to do slavery.

And so the shorthand is slavery was

400 years the reigning ethos,

because it was so profitable to do,

and then, yeah, Civil War,

and that's great, but

it doesn't unwind the psychology.

And so,

this idea of black inferiority is

sadly deeply enmeshed in ways that

are hard to tease apart,

of course in white people, but

sometimes the black people too, and

this taxes everything that we do.

And for me the cure is black

excellence and really focusing on

amazing achievement and

those kinds of programs.

And so, Kenya Barris, great creator

in LA, often says it's all about

slavery, and I used to get kind of

tired of constantly saying this,

and I realized, shit, it's true.

So, companies are, I think,

leaning into this and trying to

figure out what can we do to be

more inclusive on every dimension,

not just black white.

But I do think that as a society,

if we can focus more on black

excellence, we can rise out of this

kind of crippling disease that

comes out of basically the for

profit aspect creating a morality.

>> Sure, so

what does it look like for

us then as future leaders to kind

of cultivate that black excellence?

>> People are naturally want to be

excellent, black white.

>> Yeah. >> That ever, so

I don't think there's that much to

do on that front.

It's being able to have more honest

conversations about, again, race,

gender, sexual orientation,

all those things, which again you

guys compared to you know when I

was around here 25 years ago,

it's so much better, okay?

It's not better as much as we want,

so it's like we got to continue to

lean in to achieve the dream of

equal opportunity.

But I think in general things are

going well, and in that dimension,

I would say it's appears that on

climate we may have overcorrected.

So, Al Gore and others were worried

about climate and so

they told us that the world's

going to end unless we change, and

it seems like a lot of people think

the world's going to end.

And we have many problems in

society, there's no question, but

of all of them climate is one of

the most amenable science, we can

science our way out of climate.

We've pumped a trillion tons

of carbon into the atmosphere,

now we've got to go capture it put

it back in.

There's a lot of science technique

that we're all learning,

I mean there's EVs on

one dimension, there's others.

So I think the chance that climate

and society is extremely small, and

that there are other threats that

are again politics, countries

going to war, this kind of thing,

that are not amenable to science

solutions, okay?

Whereas getting, again, amazing

solar panels, nuclear, fusion,

whatever you guys invent, there

are science approaches to climate

which I think will bail us out.

Not easily and not free, but

again science will work,

whereas the science on human

psychology like the idea of

countries or religions or

wars, I don't have the solution for

that because we humans are evolving

very slowly, and we see

in the current time, a lot of war.

So, becoming rapid it up I think on

climate people are too negative.

>> Sure.

>> And it makes them think

the world's going to end.

So as long as

to answer your question of like,

how do we make progress, hope is

the big driver of human behavior.

And the fact that we all have hope

and have had hope and continue to

lean into hope is incredibly

important, inspiring, and powerful,

and so I hope you guys are able to,

of course, have hope not just for

your startup, but

hope for our society

to achieve a lot of its dreams.

>> Sure, and it's really inspiring,

Reed, to hear you so

passionate about this,

so thank you so much for sharing.

I have two more quick questions for

you, the first is,

you are now in this new-ish role

of chairman as of late last year,

what's life like for you now?

What are you up to?

>> Well, the good news is that

Netflix things are going super well

with Greg and Ted, and so

as long as the company continues to

grow, the role of a board is pretty

minimal.

And so, they're off and running,

and I know a lot what's going on,

but I give hardly any advice.

So you want to be, I think, as a

board member, highly informed about

the opportunity and the execution,

but you're not doing it day to day.

And like the WWE deal they did,

I've hardly anything to do with

that, or nothing to do with it,

to be honest, and

I didn't even approve it,

I just read about it, so it's like,

that's the way it should be.

So anyway,

that's a small part of the time,

mostly philanthropy, I'd love to

be baby Bill Gates, by which I mean

sort of a technocratic orientation

to improving human welfare.

And he's incredible because

he knows and has learned so much,

I'm more narrow, and so

I'm trying to do a lot around

African economy and various

technological interventions,

their mobile networks, solar,

these kinds of things.

And then in the US I work a lot on

nonprofit public schools, generally

called charter schools, to help

them grow because organizationally,

when they're successful,

they're really excellent and

they stay excellent, which is not

what we see in the kind of

unevenness of school districts.

>> Sure.

>> So those are the two big areas.

>> Very exciting, I'm excited to

see how that goes, it sounds like

you're very passionate about all of

those which is really cool.

>> I think we all are passionate

about making a difference.

You guys have worked super hard to

get to where you are here, and

you're developing tools and

near term you'll either go into

great firms or create great firms.

But as you do that, you also

want to make a difference in

the world and you're all, I think

going to be very talented at that.

>> Thank you.

Reed, this has been a fantastic

conversation.

Before I open it up to the audience

for questions,

I have one final question for you.

Our view from the top theme this

year is redefining tomorrow.

So, Reed, as chairman of the board

at Netflix, if there's one change

you could make to redefine

tomorrow, what would it be?

>> I think if you guys think about

the age of abundance and

what's going to be possible with

technology, there sort of, again,

if you look over 10,000 years,

there's two big drivers of positive

change that have happened.

One has been technology, and

you guys are well aware of all

the things that are different,

whether it's antibiotics, driving

a car, etc., than 5,000 years ago.

But the other one is the moral

ethical systems, the notion of

identity that we need to continue

to amount of progress on,

I call that story.

What's the story that gets us to

trust each other?

What's the story that makes us who

we identify with?

And a simple example is

the New Testament versus the old,

in the New Testament it was turned

the other cheek, love thy neighbor,

these were radically different

things than the Old Testament with

eye for an eye, okay?

So that's an example of moral

progress about identity.

Another one is consent to

the governed.

That the original idea was

the people don't matter, it's

the kings, and it's hereditary and

you're close to God,

then over a couple hundred years.

As we developed

this idea underlying democracy,

that the consent of the governed

was the way to rule.

But these kind of big ideas

come along infrequently and have

tremendous impact in human society.

And so, again,

when you look back over 500 or

5,000 years, a bunch of us will

work on technology, and that drives

a lot of human progress.

And the other aspect is we all

contribute to the human ideas, and

what are the big ideas that connect

us that make us a better society

and a better world?

And those things can have

huge improvement too.

It's just

they're multi-generational because

our psychology evolves very slowly.

>> Thank you so much, Reed.

Well, with that, I will now open it

up to the audience for Q&A.

>> Hi, my name is Andrew,

and I'm a first-year MBA student.

It was great that Katie touched on

culture and responsibility.

And my question is about

a little bit of how they relate.

So specifically honing in

on employee giving.

So this is a really interesting

aspect of Netflix's benefits.

At a time, you even increased

employee giving to two for one, and

that would seem temporary and

maybe it will become permanent in

the future.

And I'm curious,

how do you think about that benefit

and how it can help solve some

of the issues that business

itself cannot purely solve?

>> Obvious answer is, because it

gets employees to give and feel

good and the company matches and

it's a better society.

The less obvious answer is

without that, all the employees say

the company should donate to God.

The company should donate to

the flood.

It's people love giving away other

people's money.

>> [LAUGH].

>> So the more that you make it

an employee match and focus on that

as what the company does, the more

it's realistic, because then people

give $300 a year, $500, there

are two important causes, okay?

So you can think of it as when

an organization whether that's

a company or

university has to take positions,

it's divisive because even if 90%

of the people agree 10% don't and

it's partially their money, Okay?

And that's certainly true with

customers, right?

And some of our customers like this

cause versus that cause.

So as a company,

we'd like to stay away from that.

So by really putting the focus on

employee giving, we're like yes if

you're passionate about this topic,

give a lot of your money, and

we will match it.

And the relative costs in,

the benefits to us in Harmony

are very high because the employee

match is a less coercive mechanism

than the company deciding what to

give to and what not to give to.

>> Thank you so much for

coming back.

I really appreciate your time.

I'm Lexi Ling, MBA 1 at Yale GSB,

and I'm doing also the degree with

education school.

And I'm especially interested in

the interdisciplinary area between

entertainment and education.

And given your strong exposure in

education, like from Peace Corps,

math teacher to

California State Board of

Education, I'm really curious about

your view on the educational

social impact of entertainment.

Also, I'm curious about,

do you have any strategies or

in-house initiatives that Netflix

has to ensure its content actually

delivers good values,

educational influence, and

good social impact in the world to

all the age groups you cover?

Thank you so much.

>> Yeah, it's a fascinating

irony that here I do all this

work in education.

And then in Netflix,

we focus on entertainment.

And I'm a super big focus guy,

you can only do things great if you

focus.

And so Netflix is very focused on

entertaining and giving you those

guilty experiences.

And it may not make you a better

person, it may not teach you how to

do this or that,

we don't even have cooking videos.

So I would say I've always

kept those worlds separate.

Now within education, people are

figuring out Duolingo is probably

the most sophisticated at it.

How to use gamification to have fun

at learnings to give off those

psychic rewards as you continue.

So all the things that the social

networking companies

learned are applied in Duolingo.

So that's a great

example of using essentially

human behavioral observations of

learning in an education game.

But again, that's really different

from trying to be entertaining.

How do we create characters that

you care about more than you care

about those people at Disney or

HBO or others?

And so we keep the Netflix one

very focused on how much do you

connect with those characters and

want to see the next episode or

the rest of the film.

>> Hi Reed.

I'm Ana, I'm an MBA two.

I love your thoughts on AI and

how it will help

enhance our creativity.

Would you talk a bit about your

thoughts and predictions on

immersive technologies such as VR

and AR?

>> Entertainment is often pretty

connecting that you watch with

someone that's important to you, a

spouse, a date, a parent, a child.

And you know the joy of

it is somewhat the experience

of the moment and somewhat it's

about talking about it.

Either the people that watch.

And so

all of that connection-oriented

aspect of entertainment means that

these isolating devices probably

won't play a big role.

Now if these devices,

actually because you've got other

people in your view, that might not

be physically in your presence find

ways to connect you,

then they'll have broad impact not

just in entertainment, but

across many areas.

But so far, they've all

been relatively isolating once

you immerse into them.

So people are working on it, but

I would say I'm somewhat skeptical

and it's change of entertainment

because so much of what we do as

humans is the reason we're

watching the show is because it's

with someone else and so

it's a joint experience.

So if I had to guess I would say

not a huge impact on storytelling.

Potentially a pretty big impact in

gaming where you know you put on

your gear and then you're immersed

in some you know interaction or

world as opposed to the storyteller

to you.

>> I am Jack Stone.

I'm a first-year MBA here.

I'm in interested to hear how you

balance things like encouraging

people to your point,

take out the trash when people

aren't looking, versus something

like a yearly performance review

where you are focused on optics and

looking, well, to your managers and

higher-ups, and how those two thing

could come into conflict?

The annual performance review is

rarely done well.

I think we have it in place in most

companies because otherwise, the

person might not get any feedback.

So it might be a necessary device

but it's so

much better to help coach people

throughout the year around.

But you know after

this meeting those kinds of things.

And so what we try to do is really

lift up the gift of feedback and

to make feedback so continuous and

expected people walk Around Netflix

and say,

do you have some feedback for me?

And they're just all the time

asking for feedback.

And I think if you can set up

a culture where that's expected and

valued, that's kind of like

brushing and flossing every day,

and that's the stuff that

really helps on dental or

emotional hygiene.

And then when you do the once

a year to the dentist, there's

I didn't find anything, okay?

So you might say there's a once

a year review, but it's basically

all these interactions.

So think of it, you want to have

feedback be like brushing and

flossing so

that it's an everyday activity,

it's a little more interactive

between people so I suppose that's

a little bit of a difference.

But think of it as that's

the maintenance and try to get

everyone in your organization

to always be asking for feedback.

And of course as a leader then

you're constantly talking about

the feedback that you've gotten,

you find a set of devices to make

sure that feedback either In

the moment, or like say shortly

after an interaction, is much more

useful and constructive than the

annual performance review aspect.

>> Wonderful.

Okay, Reed, before I let you go,

it's view from The Top Tradition

to finish every interview with

a series of rapid-fire questions.

So I'm going to make some

statements and

then you'll fill in the blank with

the first thing that comes to mind.

Sound good?

Favorite Netflix series.

>> Beef.

>> Hardest mountain you've

ever skied or snowboarded.

>> Palisades KT22.

>> Okay.

Biggest lesson from your time in

the Peace Corps.

>> It's fun to be independent.

>> Favorite way to spend time with

your family.

>> Cooking.

>> And what are the odds that

Stanford game gets added to

Netflix's 2024 original series

list, >> [LAUGH].

>> I wish I had come in my green

Squid Game.

>> [LAUGH].

>> That would have been a perfect,

if I had known.

You guys have so much potential,

maybe not so much in acting, but.

>> [LAUGH].

>> In business, you crush it.

>> [LAUGH] Thank you so much, Reed,

this has been so fun.

Reed Hastings.

>> [APPLAUSE]. >> Thank you.

>> [APPLAUSE].

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