The 3 Secrets to Netflix's Success

It is fair to say that there has never been another company like Netflix. It has disrupted a category that was stagnant for decades and has revolutionised the entertainment industry, generating billions of dollars in revenue and captivated the imaginations of people from all corners of the world. As the world’s leading internet entertainment service with over 130million memberships worldwide it is a power brand to be reckoned with, although it hasn’t always been smooth sailing.

Netflix launched in 1998 as an online DVD rental service and in the early years went through significant reinvention. As co-founder and CEO of Netflix, Reed Hastings established an unconventional approach to business from the very beginning, something he attributes to the brands success today. According to Interbrand’s Best Global Brands 2020, Netflix is positioned at No. 41 - up 24 places from 2019 and a whopping 41% improvement! In the Forbes Most Valuable Brands list Netflix has seen the most growth of any listed brand, at #26 it has seen a 72% shift from 2019 - no doubt largely influenced by the current global pandemic and our collective human need for escapism and joy.

Last month in a TED studio conversation, Chris Anderson, Head Curator at TED, spoke with Reed Hastings about his top 3 secrets to encouraging a culture of innovation and reinvention. As a distillation of an hour long piece of content here are my key take outs


Netflix defied business tradition and has cultivated a philosophy focused on freedom and responsibility, one that allows them to adapt and innovate as the needs of its customers change. “In the creative industry you want to inspire, motivate and excite people - that’s a completely different business model to the way we have learnt to operate a creative agency” says Hastings in his reference to the idea of talent density versus volume or as the old adage claims, ‘less is more’! Keep your teams lean, high performing and pay them above industry benchmarks is the key insight here.


Netflix pride themselves on a culture that sets new benchmarks, values people over process, encourages innovative thinking over efficiency, and gives employees context, not controls. Sounds like potential chaos right? Hastings goes on to explain the learnings he has had on his CEO journey including the practise of “letting go of control”. Netflix have no expense policies, no travel policies, no annual leave policies - the traditional virtues of hard work seems irrelevant in this new model where freedom and innovation prevail. “Build a fertile company that is focused on the long game” says Hastings.


While the Netflix approach was at first met with scepticism, Hasting’s unorthodox approach has now proven to be highly successful. In his conversation with Anderson, he opens up about his own challenges during his early career in wanting to be liked and how this prevented him from having frank and sometimes confronting conversations. He realised that his leadership approach but not what his team deserved or needed to move forward or grow. He now says he lives more honestly, in all aspects of his life and in recent years is focused on giving thoughtful and constructive feedback with positive intent - “…an honesty seeking CEO instead of a kind one” he says.

As our business community emerges into a new phase of being post COVID-19, I believe that more leaders will be adopting the principles Hasting’s discusses in his book “No Rules Rules: Netflix and the Culture of Reinvention”. While I don’t agree with all of Hasting’s perspectives, I have no doubt that leaders of tomorrow will shift their traditionally focused “factory” approaches to more liberated and creative business models that encourage innovation, divergent thinking and work/life balance.

Long-listed for the 2020 Financial Times & McKinsey Business Book of the Year and co-written by leading business thinker and author Erin Meyer, Hasting’s dives into the controversial ideologies at the heart of the Netflix psyche and this TED conversation with Anderson is a must watch summation of his philosophical approach to business.

Click to Chat