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The Moonshots Podcast goes behind the scenes of the world's greatest superstars, thinkers and entrepreneurs to discover the secrets to their success. We deconstruct their success from mindset to daily habits so that we can apply it to our lives. Join us as we 'learn out loud' from Elon Musk, Brene Brown to emerging talents like David Goggins.
Mike Parsons: [00:00:00] Hello, and welcome to dementia. It's podcast. It's episode 166. I'm your co-host Mike Parsons. And as always, I'm joined by Mr. Mark Pearson Freeland. Good morning. Hey,
Mark Pearson Freeland: good morning, Mike. What an exciting few weeks again that you and I and our listeners are going on. We are really getting a lunar powered moonshot, those of entrepreneurship at the moment.
Aren't we week by week
Mike Parsons: mark. I think it's a Blitzkrieg. I think it's a barrage of entrepreneurial, inspiration, insights, learning and habits. If you're still standing, you're probably five or six shows of entrepreneurial inspiration in a row. Mark. I'm ready to do one more. Where are we going to.
Mark Pearson Freeland: Today in show number 166, we're digging into Reed Hastings, CEO, founder of Netflix and Mike.
I think it's fair to say that Netflix is a [00:01:00] brand that all of us have at least heard of. And the majority, the vast majority are likely subs subscribers. And this is a brand that actually surprisingly it's been around since 1995 is quite a long time ago. Now if you didn't know that
Mike Parsons: well, Those of us on this show, mark that have a bit of gray head do remember the joy of the old DVD.
So hence we have some long memories into those little red envelopes from Netflix, but boy what an exciting opportunity for us to delve into an enormously popular service. We were joking in the last show that Paul Graham has been part of so many products and services and companies over 3000.
In fact, that we were pretty confident that our list. You used at least one of them. And I think we can be equally, if not more confident that [00:02:00] of those of you listening today. There's a very good chance that most, if not, all of you are Netflix customers, this is a worldwide phenomenon and we get to listen to the ideas of the founder of the entrepreneur as he builds the company in real time.
I think that's pretty cool.
Mark Pearson Freeland: I think that's pretty rare, isn't it? Sometimes the lessons that we're learning from are in retrospect on the mic, we'll be hearing from individuals, maybe retelling case studies. We'll be hearing from a, an entrepreneur or a philanthropist at the end of their experience looking back.
But you're right with Reed Hastings, he's building this brand and all of us can sit on our couches and actually watch the brand grow. Maybe some of us are owning some shares, some stock on the, on our phones and we're following the brand growing. And it's something that we can all watch and learn from.
And it's fantastic to be able to get into read again today. [00:03:00] Hear those lessons. Here, what enabled him to stay on the right course to build the Netflix culture deck, to actually learn from him with regards to how he does his business and how he works with teams. And I think it's a fascinating opportunity for us to continue this learning about being an entrepreneur and just keep on improving our mindsets towards building products and building brands.
Yeah,
Mike Parsons: I totally agree. And it's really interesting because hailing from Silicon valley Reed Hastings and the Netflix success is not a purely technology story. What's really interesting is what we have to learn to get on the show today is that there is thoughts around culture. There is thoughts around continuous improvement even how he thinks about managing people like managing a sports team.
And I think that's really. Really a different take on the world of technology. [00:04:00] In fact, it's quite similar to that of Paul Graham in the previous show. It's not just the idea. It's the founder. What Reed is saying. It's not just the tech, it's the people. And we've got the chance to learn all about that today.
Mark. I'm ready to go. How about you, mark?
Mark Pearson Freeland: Yeah, I'm absolutely ready to go. Let's get back into Reed Hastings showy.
Mike Parsons: Why not? So get ready to listen to one of the greatest brands of the modern age. Netflix. Let's hear the story of Netflix and more importantly, let's see what we can learn from the founder of Netflix.
Mr. Reed Hastings. All right. I am ready to rock and roll. I am ready to get lights, camera action on the world of Reed Hastings and Netflix. And we are going to start with actually it's been a real delight. We managed to find a really good sort of introduction, clip for Reed Hastings and already in him telling a little bit of his story.[00:05:00]
He gives us some insights in how to stay focused, to focus really on a destination. And I think just so all of our listeners know this is the clip is a little bit longer than normal, but it's going to set the scene for a really exciting show. So let's get into it. Let's listen to Reed Hastings and him having a north star.
Reed Hastings: At the end of high school, I got a job selling rainbow vacuum cleaners, and I was telling them door to door in the Boston suburbs area. Of course, there's a couple of places I got thrown out of and other places where they want to, it was a fantastic introduction to selling. And luckily I still went to college.
The lucky break in my life was getting into Stanford graduate school in computer science and. In the past, I had never met entrepreneurs and I'd put them on a pedestal, like they were godlike and all of these ways. And so it really helps to [00:06:00] be around some of them to see their regular people with a good idea.
The thing I took away was with, if they can do it, I can do it. And I worked at a startup for two years. I have a typical 25 girl programmer. I have messy desks and lots of old coffee cups growing various fungi. And I went into work one day really early, and I caught the CEO. I'm cleaning my mugs in a bathroom.
And I was like, oh, have you been cleaning my mugs all year? And he said, yes. And I said, why? And he said it was the one thing I could do for you. You do so much for the company. And so I ended up feeling a course. I got that. I would follow that guy off the ends of the earth. And that's pretty much where he took the company.
And I learned so much in that I realized leadership is pretty nuanced because there's the personally endearing part about character and followship in it. So the strategic part about not leading the company into a box canyon, I saw it was a really good lesson on the time that I started my first company, I was 30 [00:07:00] and everyone said, oh, I was so young.
The fundamental is to be self-aware enough that you want to learn. And you learn through the criticisms and suggestions of others at pure software. The company's culture was not that strong. And that was the beauty for me of getting a start over with Netflix, because I realized that the trick in businesses, figuring out what scenarios could grow a week into a material threat because not all things will kill you.
And if you get distracted dealing with every possible threat, you'll be very unfocused. I think of management strategy like chess, where a human chess player has to examine a couple of key strategies and mostly they're pruning the tree of possibilities. And if you prune correctly, you can see further down than the next person on the relevant paths.
From the day we started, we knew DVD was going to die. And we named the business Netflix and our DVD by mail.com. So we had an advantage over blockbuster that had a really great business in [00:08:00] store rentals before it suddenly went away. But I wish we had realized how hard they worked, going to attack.
And there was a multi-year battle for survival between blockbuster and Netflix. One quarter we shrunk because they were basically hitting us on price so hard. We underestimated them to our peril. And honestly, in hindsight, if they had started two years earlier and when we were that much smaller, they probably would have won, but they had quite a bit of debt, which constrained their flexibility and then ran out of money.
The company is like jazz. You want players who can improvise arson because the climate is constantly changing and you're learning along the way, but you also have to have great judgment, like the chess player. So if you keep your north star, as how do I make the best product in this category for the people I'm trying to serve and then not get too distracted?
That's probably a good place to be nice.
Mark Pearson Freeland: It's a good long clip. I think that's a great introduction to read. It's honest, it's inspiring. It [00:09:00] reveals a few great lessons that he's stumbled upon over the years. But what I actually like about that clip is it shows his character. He's this honest open guy is all about thinking about challenges and opportunities from a management strategy perspective.
Obviously he talks about the importance of having north star, which I love, but also he's referencing something that we'll visit a little bit more very soon in the episode, culture, as well as learning. He's he immediately references, seeing the CEO cleaning his car and then he references some of the lessons that they saw from their competitor.
Blockbuster. It's a good clip ad illustrating the importance of us. Day-to-day looking around us taking everything in and noting where our competitors are, where our colleagues are, where the world is. I think it's a nice timely reminder there. What do you think, Mike?
Mike Parsons: I thought he was how [00:10:00] Frank and down to earth was just the whole way he spoke.
Like w he, wasn't his dislike us chatting. He's not like trying super hard to come across as a CEO. He's he seems really comfortable in himself, which I think is so important for leaders. I, what I like is how quick he is to point out. We got smashed up by, by blockbuster in the In a lot of his reference to learning.
He talks about learning from failure, which I think is so important. It reminds us that it's not a dirty word. It's actually the most powerful thing if we choose to make it. And I just love that as it sets us up to talk about how you create a great culture, how you survive, the challenges that he mentioned, I think he's set us on the right [00:11:00] course.
And I think actually outside of the content, what that was a reminder to me of is just be yourself, just be the person you are. And that's a big part of leadership. And I think that's why he can tune into culture. So well, cause he's not spinning up his engines trying to be empirical or presidential, he's just being.
Read, and that sets us up to talk about culture and how you bring it alive and how your frame of reference really needs to change as you grow your business. So we're gonna start by learning from breed how they actually, as a company, they get better as they get better.
Reed Hastings: Yeah, I think everyone tries to build culture and values at first you have to [00:12:00] stage it with a company to the degree that you're 20 people and you've got no revenue.
It's a very implicit culture. And you spend time on things that could kill you product market fit and that's appropriate. And then later, if you're Glen to last, then you say, okay, how do we make sure that as new people come in, the culture gets better.
And one of the big things is probably this idea that you get better as you get bigger. So everyone implicitly has the idea that you start sucking as you get bigger, more political, harder to get stuff done, and you have to actively fight acceptance of that and come up with very concrete examples where like Netflix is significantly better in culture than three and five years ago.
And then 10 years ago in 15. And why is because we got more brains thinking about the. This is where mouth is really went wrong. So of course, mouth is in the late 17 hundreds that everyone's going to starve because you look at all the people growth and you look at the fixed agriculture, and then they didn't realize that, you know what, basically, as the people grew, the [00:13:00] ideas to improve agriculture would also improve.
And so we've had a massive explosion in agricultural productivity and the ability to feed 7 billion people, which he would be shocked by. And it's the same thing in company culture, which is if you have more if you have a thousand really thoughtful people thinking about how to improve, you make more progress than if you bet a hundred.
And so we are actually getting better as we get bigger, but it's constantly changing the frame of reference. That's really what the leader does. That this is possible and that in fact we should aspire to it
Mark Pearson Freeland: and make it happen. Yeah. There's this combination between having a leader who drives the direction simultaneously having a team around.
Who are helping you prune those trees. So going back to the first clip read saying no matter how busy things get, you can always prune those trends away and see where you're going. It feels to me as though by combining leaders [00:14:00] as well as or the founders, essentially who may well begin with one really clear insight as to, okay, this is what we want to do.
This is our product market fit. This is our mission statement. Once you start adding people around yourself, there is that risk of going a little bit off piece, but actually you are supported by your colleagues and by those thinkers and do, as they get placed around you as well. That's helping you along that journey on their mic.
Mike Parsons: Yeah. So I guess the question is, so how do we do it? Like how do we contribute in a way. To our companies that they can get better as they get bigger. And the first suggestion I've got as I think about how can I do this is I think, treat every hire in the company as if it's the last person you're going to be able to hire cherish the [00:15:00] opportunity to hire and really be rigorous.
And it reminds me a little bit of something mark Andreessen said, which is you're only as good as your worst person and what he means there is. If you hire someone who's not really a good fit, but you just want to fill the seat. Then you're dropping the level of the whole organization. And in a funny way, Reed is saying the same thing here.
What he's saying is that every person should be adding to the brainpower thinking about culture and the behaviors of contributes. To that cold share and everything that they do. So for me, this is a huge reminder. Every person you hire is a contributor to the culture. So ask yourself, do we get better?
When we add this person to the team, do they bring good thinking? Do they bring new thinking? Do these guys demonstrate a level of ownership that we really need someone [00:16:00] to come in and take hold of things. I think that's what he's reminding us to do. So my question for you mark now you've heard read, and he's talking about getting better as you get bigger with a big emphasis on the quality of the people, thinking about the problem.
What do you take out of this? If you want to make the culture at QualityNet better, what are you what comes to your mind? How might you do it?
Mark Pearson Freeland: I think it starts with. Being aligned and understanding what the business does. I think there's a F there's a functional logistic operational layer that I suppose, sets when you're sitting at home and you're reading the job description thinking, okay do I deliver X, Y, and Z, but also on the other side of that coin, there's an emotional one.
And that's what I think is the really important thing to, to cultivate. [00:17:00] And I think what Reed has always demonstrated with his culture deck, and there's a lot of work online and interviews around the HR process for Netflix. When I think about my job and qualities and what I do with my team is okay how can I.
Mo those around me, how can I help my colleagues? How can I ask better questions? How can I push their work forward? How can I be a really great team player getting us to that ultimate goal, whether it be a project being delivered or actually growing the company and the region.
Mike Parsons: What's really interesting in this next clip.
We've got Reed Hastings, literally laying down the key word and the key concept. Many people make the mistake of thinking that great business should be like a family. And I think what Reed Hastings has is a much better metaphor. So let's [00:18:00] have a listen to read, talking about culture and business and building a team.
Like it's a sports team. Yeah.
Reed Hastings: We're like a professional sports team and we want to win a championship in our area. And we're very honest with people that it's about performance. It's not about seniority. It's not about politics and working in Netflix. It's like being on an Olympic team and it's really hard, but you do your best work when you're surrounded by people who are really talented and try hard.
And so we try to be very respectful, but it's fundamentally about performance for us. And we try to be clear about it because it's not for everyone. We want people who join Netflix to know how we operate. And the professional sports team is the closest analogy. Okay.
Mark Pearson Freeland: Yeah. This for me rings. True. It rings very much to the core of [00:19:00] me actually, because when I do.
Join a business or go and get assigned to a project, I think to myself. Okay what does it mean to me? How can I work as hard as possible? Because ultimately it may matters in everything that I do ladders up to the ultimate final delivery of whatever it might be. And I'm a firm believer in you get out of it, what you put in.
So this analogy that Reed is using is a real driver for me because I'm thinking, okay if I am surrounded by the very best people and the very best players that right raises me up, I need to be performing to the best of my. I need to be trying as hard as I can. And that's probably a good motivator.
I like that. I like being surrounded by that as a tool. Yeah.
Mike Parsons: Yeah. It's not it's not unlike when you go to the gym and everyone's working out really hard. You instantly geez, I'm really getting into it today. [00:20:00] I think it's about creating an environment where everyone's 100% trying to perform doesn't mean you can't have fun, but when push comes to shove, people are really performing at their best.
Now, obviously it's like executing tasks is very much what performance is about. And. It's also about ideas and the exchange of ideas. So I wondered my, when we talk about what he's really saying is the way he's built Netflix is it's a meritocracy, right? Those that perform rise to the top.
And when you think about what does it take to be great as a team in business, or if like me, you're totally addicted to the last dance, the Michael Jordan documentary on Netflix and ESPN. [00:21:00] When you look at what it takes to be a great sports team, what are some of the attributes that come to your mind?
If you fondly remember your favorite sports teams or you remember moments in the office where we've been great what characterizes greatness? If we're like a sports team, what do we see? What are the behaviors? I think one of the real behaviors is driving for turtle alignment. So if I'm on a sports team to you to continue that analogy, I want to know that all of those around me are driving us towards the goal, the finish line, the the difference between staying where we are and elevating ourselves in the championship when I'm around business and colleagues, I think it's similar thing.
Mark Pearson Freeland: I'm thinking, how do I. Stay [00:22:00] aligned with the business. How do I stay aligned with my colleagues and how do I help them if they are going to help me continue to play my best game? How do I support them without tripping anybody on the field?
Mike Parsons: Yeah, I think you're absolutely right. Communication. Having coached rugby, what I can tell you is that one of the hallmarks of a great rugby team is they're always communicating their position where they are so verbally giving cues.
I'm here. Another thing is calling plays. People understanding the place, having a plan and sticking to the plan. And I think the other thing, and we mentioned it a little bit earlier, is this ownership thing. If you own your performance and in doing so, know that if you're backing up your team, Even though it's their play.[00:23:00]
If you're backing up and double checking, you might catch one or two little things in the office. If you just help someone review their work, double-check say let's do a quick review together. That to me is where one plus one equals three and that's team that's where you've got individual performance coming together.
I think isn't it great that we can look at Reed Hastings and learn from him that it really comes down to performance and a focus on performance, but also doing that within a team context. I think it's really inspiring to see such a great company is truly built as a meritocracy built on merit, built on the things that you deliver, that you do, the way you play the game.
I think that's really inspiring to EMA.
Mark Pearson Freeland: Yeah, I really do. One of the things I enjoy most about work is when I feel. Of a product or a project when you feel empowered, you want to try your hardest and do your best work. And that's [00:24:00] very empower and motivating. Oh
Mike Parsons: And it's good to do.
It's even better when the result and the outcome is really good
now. So what's really interesting though, is that great sports teams like great companies can sometimes fall into the trap that they have one set of plays and they become obsessed with only playing that way. Like they become too scripted. They seem to lack spontaneity and creativity. Just like you might see in a sports team, you see it exactly the same app work and we've got this great clip right now where.
Read is going to warn us over controlling or micromanaging the business. In fact, he's great challenge to us is that he describes the way [00:25:00] they work and you'll never believe it. He's going to talk to us about working on the edge of chaos.
Reed Hastings: The great thing about being able to do two companies in my life is not making the same mistakes.
So when the first company, as we grew and went public, we put in, excuse me, a lot of process because we had the idea. If we could just eliminate errors, think how good we can be. And so every time something went wrong, we put in a new process and we were so proud that we dummy proof the system. And what we didn't realize is if you dummy proof, the system only dummies want to work there.
And so then the market changed and all of the kind of innovative, crazy thinkers had gone. And everybody was still, there was really good about following the rules, but the market had shifted, this was the rise of Java and the internet. And we were unable as a company to adapt. And that's when it hit [00:26:00] for me.
Short-term optimization about being efficient is the death of long-term success and innovation. And that we should build a company in Netflix that tolerated some short-term chaos. And we manage right on the edge of chaos and the value of that is keeping and stimulating the amazing thinkers. So when the market.
Like DVD to streaming or licensed to expand to original content we have within Netflix, all kinds of original thinkers and that's the long-term optimization, but all of us in organizations want. And so that's really fueled the passion behind the culture deck, which is why short-term rules and process kill long-term health and innovation.
And I think
Mike Parsons: that the freedom responsibility balance, instead of saying play by these rules, help people to
Reed Hastings: be more adoptive. Absolutely because it focuses people [00:27:00] on having to think for themself. So we always want people to thank. And then when you attract thinkers, you're much more adapt because it's not following the rule book is how to succeed, decide to get into original content.
I didn't, I thought it was about idea locally in freedom and responsibility, you trust the people you work with and Ted's around us, who was also a brown fellow. When is here tonight, they just
Mike Parsons: stand up
Reed Hastings: So Ted fell in love with house of cards and with the basic idea of moving into original content and said, trust me, it's only a hundred million dollars. And so I did, and he was worth it. And out of that, the world got house of cards.
Mark Pearson Freeland: It's another great and quite meaty clip. There's lots and lots to delve into.
It would have been a lot of fun to be there, to hear him do that speech. The areas that for me, Mike cert out is all [00:28:00] about not lacking spontaneity. I love this push by Reed for us to. Sometimes go and break the rules. That sounds like one of the main drivers of Reed's career. He hasn't always stuck between the lines.
He does approach challenges as well as opportunities with a slightly different out of the box approach which I really realized that in a bit, but also throwing yourself at chaos. It's almost as though he's telling us, okay, go and find something that you see as the challenge to your business say streaming versus online DVD and how you sat at it, go and figure out how you might be able to get into that space.
And I think that's a demonstration of his innovation and his way of thinking.
Mike Parsons: Yeah the what he's talking about is [00:29:00] living somewhere between chaos and structure And particularly in a knowledge economy ideas of what, when, and then the structure to get them done is what brings home the money.
I think what's really fascinating. Is he, the CEO thought something was a bad idea yet this other guy came to and said no, we should do this. It turns out to have been a huge win for them because not only was house of cards, massive, it opened up now and massive full frontal attack that they are doing on original content.
Can you imagine that four years ago they weren't making their own shows at all and it now makes up a huge piece of their offering.
Mark Pearson Freeland: Yeah. Netflix originals is huge. To be Frank, I have a feeling. That I may have even signed up originally back in the [00:30:00] day for house of cards, come to think
Mike Parsons: of it.
Oh, there you go. Now let's bring this back to ourselves and to the listeners. Here's the challenge. How do we live and survive? How do we thrive in between structure and chaos? I think this is the challenge he's putting before us now. And what I'm going to propose to you is something that resonates so strongly with me, which is as long as you have a clear mutual expectation between yourselves, as colleagues and as a team.
And when I say expectation it's like ownership, number one, communicating number two, curiosity, number three, and number four, desire to be an expert in something. If we all hold those values to be true. We don't need to worry too much about structures, because if you totally own the [00:31:00] outcome of the work that you do, and you're communicating, and sharing and collaborating and learning along the way, don't worry.
It's all going to turn out good for me. Those are the pillars and which you can then let go on structure because you're so deeply aligned on values. And that's what this culture deck that he often refers to. And we've referred to, by the way, For all of our listeners we'll have a link to the culture deck in our show notes.
It is well worth your while. In fact, Sheryl Sandberg said recently it's the most important document on the internet. She uses it a lot. I'm always using particularly the emphasis on highly aligned. So this is some some thoughts on, on, on how I think about living between there, but mark, how do you see yourself?
What are the things did you do to live somewhere near the edge of chaos? How do you have just enough [00:32:00] structure and just enough freedom?
Mark Pearson Freeland: Yeah, I do like your four columns, your four pillars. I think that's great. And just before I turn the mirror on myself, I think just to add to your pillars, it's nice that once you.
Have those four pillars aligned for each individual. There is that trust, that foundation is so strong that you don't need to go really deep into logistics, planning and so on. So forth because you've got trust
Mike Parsons: between one another. Let me just double down for a second. If you have total ownership in you're a good communicator, I don't need to worry about you getting stuff because you will communicate that you're stuck.
You will ask for help because you want to learn. And because you have the outcome of the work you're doing in mind. So it's not the classic thing of if I don't ask no one or tell no, because of those values, I don't need to worry. You'll just come to me when you've got a problem [00:33:00] that like, I can't tell you how important this is, how you live on the edge of chaos.
But the thing is if you and I are working together and I haven't been explicit about my need for you to own something my need for you to communicate with. Then how can I have, how I'm I have no reason to have the entitlement of sitting in my seat and say, oh mark will reach out. If he needs me.
If we never made that explicit at the start, then what's going to happen is something is going to go wrong. And we're all gonna find out about it too late. However, if you have alignment on values, how you want to behave with each other, that you will always take ownership. You'll always communicate. Then I can actually step back and say, I can give you space in this example and say, go for it.
Cause I know you'll raise your hand if you're in trouble. This is essential to living on the edge of chaos. Reed talks a lot about it in the deck, but mark, let's turn it back on you. [00:34:00] How are you going to read? How are you going to live on the edge of chaos?
Mark Pearson Freeland: I genuinely believe that living on the edge of that blade of.
Chaos and so on. It is it's thinking for yourself I think if I'm wondering, okay where, how far is too far? Am I leaning over one side or the other? Am I not challenging myself? And the opportunity enough? I will. I have to think for myself and challenge myself and question, okay what is it that I'm doing?
And I think to tie into what you were just illustrating there, that's the empowerment, that's the ownership. So when I have received direction, when I have received that responsibility, it is then the ball is in my court to think for myself. So actually I feel very connected and quite aligned. I think that Blake and that line between the chaos is when you have that [00:35:00] total alignment between people that communication, the sports team.
Hey, I'm over here, over there knowing where people are in. The individuals owning and thinking for themselves. And that's where I think I challenged myself and how I stay on the right side of boredom and chaos. So another thing is, I think this is such an important opportunity to share with our set amongst ourselves or with our listeners.
Mike Parsons: I would propose this. I think whenever you're in a collaborative project and you find yourself starting to blame, even in the conversation in your head that you are blaming others, this should be a massive red flag [00:36:00] because what you're essentially doing is. Letting go reducing your sense of ownership and saying it's not my fault.
It's their fault. They didn't do that because actually someone is a high-performance member of a high performance team will turn around and ask of themselves, what can they do to help that person perform better rather than hands in the air? Oh, not me. So I have this because I have this tendency for attributing blame.
So I'm always like no. If I was the coach, if I have their performance really vested into my responsibilities, the question becomes, okay, what can I do better to improve their performance? What can I do better to contribute to them? Or maybe they just need a tip. Maybe they needed chat. Maybe they need a vacation who knows, but whatever it takes to help them getting back to before.
That is that's the upside and the flag of when you're getting [00:37:00] away from that, when you're departing from the Netflix model, I think that's when you're starting just to point fingers. And for me, that's a big flag that I always call my cell phone so that we can still get to the outcome, regardless of who's up, who's down in terms of performance, we can all band together.
Mark Pearson Freeland: No, I think that's really valuable. That's a nice insight too, to share. I think it can be very challenging to accept or be aware of one's own behavior. So the fact that it's one of the things that you fall into and therefore you've got the opportunity to then slap your hand and say, oh wait, hang on.
I'm doing what I always do. That's quite a. Less than quite a good value and awareness add to have I don't know whether I could call off the top of my head a similar thing, to [00:38:00] be honest, but I do love that, that, that honesty there, I think he had on it for the next episode, I'll make sure I have a similar
Mike Parsons: insight while you think about that.
I just want to remind all of our listeners that we're at the kind of mid point of getting some really big ideas from Reed, how to live on the edge of cows, how we're really like a sports team and really every person you hire should be a net contributor to the culture to make you better. These are some fantastic things that we can get from read.
Don't forget that we will have a link to the culture deck from Netflix in our show notes. And you can get those mark. What is the destination? It is
Mark Pearson Freeland: moonshots.io. Right destination soon to be as large as Netflix, I reckon. I
Mike Parsons: think so. Give us a couple of weeks and we're totally there. [00:39:00] So now we're going to make a little bit of an interesting pivot.
We're going to go into things obviously related to culture. This is one of Reid's big things, but what we're going to do is move into a couple of things that are applicable on a very personal level. They might be habits or rituals that you can get into. And I think this is a very complimentary set of thoughts and ideas, inspiration from none other than Mr.
Reed, Hastings, CEO and founder of Netflix. And this first shot in the arm for all of you, our listeners is about improvement. So let's have a listen to Reed Hastings to learn how we might always keep on. So then the question is read, what do you do to not lose the culture? If you believe you got it
Reed Hastings: early on?
Yeah. One of the most common questions new employee asks is how do we preserve the culture? And I say to preserve [00:40:00] something to pickle, it is the wrong solution. We're not trying to preserve the culture. We're trying to make it better. And it's materially better than it was five years ago. And I'll cite a couple of specific examples and then say what your job in addition to doing your role is to figure out how do we get even better?
Because it's only when you struggled to get better that you really keep it vital that alive. So you always have to be saying, yeah, it's pretty good culture, but I'm sure it can be better. How can we be better? And so it's that struggle to improve that keeps it fresh.
Mark Pearson Freeland: And not only is it a struggle or a a vision that reads talking about with business, I think it's also applicable to us as individual.
For me, I can own my ability at being the best version of myself. I can own how much work I put into things, my performance, as well as my as you were saying, my [00:41:00] recognition. If I blame others it's all about this communication for planning. I like that clip because it's telling me, okay don't just sit on your laurels.
Don't allow yourself to get caught up in the wind or the waves and let things just take you along for the journey. Make sure that your value adding and creating enormous. Difference for those around you as well as the business.
Mike Parsons: Yeah. He's really reminding us not to stand still with me.
Exactly. And so I love that the love the way in which he challenges us, that culture as an individual and as a group is it should always be improving. And my biggest sort of aha, as I think about how to embody this idea of always improving is whether you're talking about yourself or your team.
Invariably, those are deeply [00:42:00] interlinked in a business setting. The key thing for me is to make small, but very regular improvements. Now, if I said to you mark, we must do 20% more projects every year. You would think to yourself that feels so daunting, right? That's a lot of work. I can't.
Yeah. What, you don't want me to sleep. Come on. However, if I just said to you, how about every week we we improve our efficiency on projects by 1%. And then the following week, it's 1% the following week after that is 1%, actually that doesn't feel too hard to digest, but net, after a year of 52 weeks of improvement of 1%, every [00:43:00] single week, the outcome is actually pretty remarkable.
And I think that if we do want to keep on proving, because it can feel change, can feel relentless. And I think it's when we just make it simple and digestible and immediate and That's when we can like, okay. Yeah, 1% better is okay. Okay. So we just have to do deliver this one, one document extra this week compared to last year.
Yeah. Okay. All right. Let's see if we can do that, that's continuous improvement and it's just keep on trucking, be disciplined. And before you know it, after you, you're like, wow, have we improved? I think that's at the heart of what we can take that, so mark we're talking about this constant improvement, but you've got to have the right mental models.
You've got to be thinking about things in the right way. And I think there's a lot to learn from net from Reed Hastings in this part to. [00:44:00]
Mark Pearson Freeland: Yeah, I really do. This is a nice clip that we're about to listen to because it references a little bit of the culture deck we've spoken about. We've briefly mentioned some of the methods and techniques they have when hiring for teams at Netflix here, it's a great lesson for us to take away in our day-to-day life.
Encouraging us to stay curious and ask more questions.
Reed Hastings: Is part of the interviewing process. Do you have essentially a culture check like this, but not like a checklist? Culture is always something that we interview for of kind of curiosity and. It's easy to find people who say, oh, I read the Netflix culture deck.
I love it. I really want to be there. What's harder as old what are the main things you disagree with and why and when we get a blank stare, we're like, okay, not really a first principle thinker. And when they say I thought the way that [00:45:00] you didn't talk about how to a culture rate and if I'm not great in day three, am I out or is there do you look at it like a athlete where it's over some time period to prove yourself?
And if so, what's that time period. And why haven't you clarified that? They were like, oh yeah, that's a good insight. First principle thinker. So we're looking for people who are curious typically self-confident, and they're not they're questioning everything around
Mark Pearson Freeland: them.
Mike Parsons: Challenging because what Reed Hastings is effectively saying to a six here is not only do you need to be curious, but you need to be confident in your thinking. And what's really interesting is you can almost look at the gifts that we're getting from Reed, Hasting as one is in culture. But the second one is in this freedom of thought of thinking better thinking different.[00:46:00]
This is where one read is giving us a lot, but to your this is a lot to digest, but what's also really interesting is how, the way you think and the way you behaving in the team as a culture, how interlinked that, the picture that read is really painting for us is that they're so interlinked.
I find this quite surprising to see them so closely aligned. Are you.
Mark Pearson Freeland: Yeah, I do. Every idea he's essentially saying every a day idea is up for debate. Even the culture deck, which we've now mentioned maybe a dozen times, which we're heralding as an amazing resource. What Reed's saying here is question it don't take everything and every idea for granted, and don't assume that everything is correct because what makes the best teams and the best employees is when you are a first principle thinker, when you were thinking, what can I add to this?[00:47:00]
Yes. And where do we want to go with X idea? And I think that for me is it can be a bit of a challenge, right? It's quite challenging to hear an idea or a presentation or any sort of messaging or communication and naturally veer towards. How could I disagree with it? Because I think naturally we are trained to be quite accommodating with one another.
And I don't think Reed's necessarily saying go out and challenge one another for the sake of it. I think what he's saying is don't just blindly accept something. Think about how you might be able to add to it because of your background, your upbringing, your experience, everybody has a different formula or model behind them that has led us to this point.
And what I love about this drive and push towards being first principle thinkers is that's something that, again, you can own your own that ability, [00:48:00] right?
Mike Parsons: We can learn a lot from Edwin Catmull, the founder of Pixar here, who we did way back in episode eight, feels like a lifetime ago. And he talked about creating safety of thought, because if people feel really safe in their thoughts, then they feel.
Free and allowed to say things that might be contradictory to the defacto thinking and the bias within the organization. And what you're clearly seeing here is the opportunity for us to understand that if we can create a way for people to meaningfully discuss, maybe argue, maybe weigh up different factors and contrarian thinking, good things are going to happen when that happens.
To some of Reid's earlier points. If you're just making everything dummy proof, then there's going to be no critical thought. Now what's really interesting about this is if you are [00:49:00] hooked on the Reed Hastings playbook, and then you're like, okay, it's about culture. It's being about better together.
Living on the, educator's not micromanaging things I'm with you. You gotta be improving. You gotta be curious. But what he does first now is to talk about bringing everything together. You've got to have an sort of an organizing principle, like a central idea, a north star. Hey, sometimes we even call them a light house.
And in the case of Netflix their north star is this idea of always delivering joy. So let's listen now to Reed Hastings talking about how Netflix delivers.
Reed Hastings: We collect this year about $8 billion of customer's money. So thank you. All of you for giving us your money. And what we do is we say that money's in trust to create joy.
We have to turn that into the most joy possible. And so we look and we say for every show, if a show [00:50:00] cost a hundred million dollars, how much joy, how much viewing did it create amongst all of you? If it cost 50 million or 200 million, of course you want different amounts of joy. And so we look at it as how much joy can we create of your money.
And if we turn it into joy effectively, then you're happy and you tell your friends and we grow, and then we have more money next year to turn into more joy. So we're we think of ourselves like alchemists, we take in money cause outcomes, joy.
Mark Pearson Freeland: It's a lovely little mantra because I feel quite connected again, w readers.
Amicable and quite authentic and honest guy, and it's quite a, it's quite an unusual admission for somebody who's worth $4.6 billion. He is calling our loop. We take your money. It's great. But it's only an investment. We're funneling it into new content, new original TV shows and films. And ultimately the reason why it's not just to keep you entertained, but it's to [00:51:00] create advocates for the business.
And I personally, I feel quite connected to that business because of this approach. And it's something that I'm sure almost every business does, including apple and so on, but I think Reed's awareness and acknowledgement of it for me, feels very inspiring and actually is something that I'm going to try and take away and think about when I'm doing projects now.
It just feels a little bit more transparent, I think is the word.
Mike Parsons: Yeah. And very similar to Bob Iger. In fact, and Bob is very focused on being a happy minute happiness machine at Disney. And he's really he celebrated the joy in which he felt in bringing that happiness to millions, if not billions, and in the same way, Netflix has it too.
I think it's very similar. If you actually break down really great companies, such as [00:52:00] zoom video they have a really big vision about what they want to bring frictionless video and the happiness that can come through connection with others. It's really funny how there are just these incredibly simple yet simple, powerful human trues that often become the organizing principle of these insanely successful companies.
And we're seeing it again here from Reed Hastings and Netflix. I think we've gone time for just one more clip, Mike, but we need a final thought. We need a closing argument for why there is so much to learn from Reed Hastings at Netflix. Where should we go?
Mark Pearson Freeland: I think culminating a lot in what we've discussed.
It's a lot about teams. It's transparency, it's collaboration, and for Reed and Netflix and even something that you referenced earlier, sometimes we all find it a [00:53:00] little bit hard to agree with colleagues and other people, but what is important to take away. And what Reed's going to tell us a little bit about now is it's important to see both sides of a point of view.
So then you can model your behavior on the entire.
Mike Parsons: Things get covered up cause people don't want to confront things. How
Reed Hastings: does that work? We're never brutal. We're always honest, but we're always respectful and trying to, when we do the Stephen Covey seek first to understand then to be understood and we're always trying to tease out why would a good person do something?
I don't seem to make sense. And so we ask, we're curious, we really don't have that academic kind of let's beat each other up and out of that will come the truth. We say, we're not like prosecutor and defense where they're extremist in the search of truth. We're more like the Supreme court where you try to take both sides of every issue and understand it.
And that's the model, the behavior we have.
Mike Parsons: It's [00:54:00] on you seeing both sides and it's not always easy, but if you start with this idea that there's always two sides to a point of view, there's always two sides to an idea. This is really the essence of seeing pros and cons, the essence of critical thinking.
And it's a bit sneaky of Reed. He's already told us a bunch today on how to think about culture and improvement and curiosity, even delivering joy. And then he comes with that one, mark. So question to you, Mike, how do we see both sides of
Mark Pearson Freeland: the admission in ourselves that are our point of view or response is subjective?
So I may not immediately see another person's point of view because I'm a product. Not only my upbringing, but maybe even my morning[00:55:00] I may have been distracted in the short term as well as the long-term. So I think what Reid's saying here, in order to be honest be curious be driven towards collaboration.
We not only need to share and collaborate our sales to other people, but also be open when other people are offering or asking for a chance to collaborate with us.
Mike Parsons: Yes. Yeah. And let's build on that for a while because I think you're absolutely right, but here's a couple of pragmatic things. Because I think I felt victim to loving my own ideas way too much in my early career, but I think it's always the starting point that people hold bias, our history and our current.
Brings bias. So look at how different the women and innovations here, as well as to the media innovation series. And one of the things is that what you could clearly see is all [00:56:00] those women were fighting big battles before they got to the battle of the idea. They were just saying, Hey, I'm a woman.
Would you please listen right now that creates a bias on both sides of the equation? I think another thing is like once you know, that there's bias around, I think one of the great practical tips we can give our listeners is to distinguish the difference between an a, an opinion and a fact. And I think distinguishing.
The difference between fact and fiction is really important. And actually if you go into the art of critical thinking and we think about reads, telling us to understand is you can start with, Hey, we got bias to we really need to dig in there and actually work out. Is that a fact, or is that like your opinion?
And then lastly, [00:57:00] to qualify if it is a fact to qualify it properly, or if it's an opinion to qualify that and what you will find in the search for truth and in, for the search of both sides of any argument is if you do a good job of, is that really the case? Show me, prove it to me. If that's your opinion, tell me how you got there.
And lastly, qualify and understand the fact of the opinion before you jump to conclusion. This is very, this is a work in progress first, or I'm always trying to not jump five steps ahead, but just to methodically, take my time, gather the facts, gather the insights. But if we do that, I think we can start along that journey to understanding both sides of a point of view.
Mark Pearson Freeland: I totally agree. I am putting my hands up. I very quickly [00:58:00] jumped to either conclusions or action. It's very easy to jump into saying I'm going to go and do this, but actually going to try to encourage my own being to take that beat, to ask those questions of another person's point of view so that I, myself can be curious read, selling us, always be learning.
And when you don't. I have that tendency too, to listen. And instead of a tendency for action that's sometimes where things can come off the rails perhaps,
Mike Parsons: and you can totally see how we get off track, because if we jump to conclusions and we only saw one point of view and we thought we are acted like the F the opinion was actually a fact.
And we went and built this huge, expensive product only to realize it was built on that completely wrong insight. You see how that happens in [00:59:00] companies all the time. And so if you can have the art of critical thinking, seeing both sides of the equation, you can go a long way, maybe 182 million registered users, way Allah, Netflix, Marky, mark.
This one has been a big. That's been
Mark Pearson Freeland: good. That's a lot of claps. A couple of really meaty ones, a lot of tips. And what a series, the media innovator series Bob, mark, and read what a triumph for it. What fun
Mike Parsons: occasion? Imagine if you had that Motley crew around a dinner table with a glass of wine,
Mark Pearson Freeland: the five of us around the dinner table.
That is what
Mike Parsons: no prizes for guessing who would be the cheekiest. There's got to be mark Cuban for sure.
Mark Pearson Freeland: Oh, it gotta be. You gotta be by then. Read is all about breaking the rules. It's
Mike Parsons: all about finding then again, they may all behave because Bob's in the room.
Mark Pearson Freeland: [01:00:00] I'll be making sure everybody's in bed on time he's the.
Mike Parsons: Yeah. Yeah. Listen that brings us to the end of our media innovators series hot off the press following our women in innovation series. So all of those, you can get all the archives@moonshots.io, but ma we are just like Reed Hastings and Netflix.
We are not standing still. We are thinking about what's next. And we, again, to go for the first time in a while, we're going to go deep on a three-part series on a one author. We are going to go deep into the world, or somebody here is, I would say he's at least a peer, if you will, of Simon Sinek mark Gerson, Freeland, who is next
Mark Pearson Freeland: On
Mike Parsons: [01:01:00] our journey into learning from innovative.
Mark Pearson Freeland: It is psychologist and Ted talker, Mr. Adam Grant
Mike Parsons: Very
Mark Pearson Freeland: prolific chap and somebody that we can't wait to sink our teeth into. He's going to be
Mike Parsons: great. I think so. I think he is a relatively new entrance into this thinking differently space. I think I think he brings like a whole collection of great ideas about how business looks and feels in a post-industrial world in a knowledge economy we've got given take this quid pro quo idea and his first book, we've got originals.
How nonconformists moved the world? Geez. I think we've had a few of those, none other than Reed Hastings himself. And then we've also got some[01:02:00] he, co-wrote a book option B facing adversity with Sheryl Sandberg, which sounds pretty on spec for the moonshots podcast, where we see a lot of brave courageous entrepreneurs, innovators, creators, and designers who have inspired us.
Adam's going to lay out some frameworks and methodologies for us. This is going to be very Simon Sinek ask, but with a different twists mark, I'm fired up for.
Mark Pearson Freeland: I can't wait. It's going to be fun.
Mike Parsons: Super. It's going to be great. Super duper. Listen, we've exhausted ourselves going deep into the world of Reed Hastings and Netflix.
We've looked at culture. We've looked at critical thinking to be a first principle thinker. How could you get so much from one chap? Don't forget. He's got a book coming out later this year, too, which will be fascinating. And then we will segue in our next show into the [01:03:00] world of Adam Grant. It's been wonderful.
Mark. Thank you to you. Are you going to get an espresso after this?
Mark Pearson Freeland: I think I will. I think I will. Maybe I'll a spark up Netflix tonight and see what Reed's got for me today. There you
Mike Parsons: go. Listen, thanks again. Thank you to you. Thank you to all of our listeners. We're almost at a hundred ratings in the different podcast apps.
And we have been popping up in all sorts of top 100 charts, which is just mindblowing to see from all four corners of the world. Looking at the list here we are popping up in the top hundred. In Cyprus, Jamaica, Mongolia year two, I Kenya Amania Hong Kong, Colombia, Israel, Finland, Thailand.
It's incredible. And we've even popped up into the top 100 global business podcasts. If you can believe that number [01:04:00] 98 as of this morning. So thank you, mark tow you'll have been most well. Thank you to all of our listeners who have contributed so much show and going forth. Keep your suggestions coming in.
Ping us at moonshots dot. This was the Reed Hastings episode 74 of the moonshots podcast. That's a syrup.