What separates an entrepreneur from other people is a “predisposition to action” and an understanding that risk-taking is “not a terrible thing,” according to Marc Randolph, co-founder and first CEO of Netflix.
Randolph, who helped lay the groundwork for the estimated $230 billion service that has altered how the world experiences media, discussed innovation and the early days of Netflix at a Sept. 29 livestreamed event hosted by the University of Missouri System for young people interested in starting their own companies.
Randolph said that entrepreneurs often have to make decisions based on incomplete, inconclusive or contradictory information.
“Every idea is flawed, but it’s taking that step and trying something,” Randolph said. “Only once you realize why it’s wrong, can you fix it and try something else. That is what an entrepreneur does all day long.”
Friend and former colleague Bill Turpin, MU associate vice chancellor of economic development and CEO of the Missouri Innovation Center, invited Randolph to share his wisdom with the goal of inspiring students and educating them about what it takes to be an innovator.
|Bill Turpin, left, discusses the skills needed for a career in entrepreneurship with his friend Marc Randolph, right.|
I’ve seen statistics that upwards of 60% of college students some time in their career would like to start a company and be their own boss,” Turpin said. “But many don’t exactly know how to proceed.”
Turpin and Randolph met in the early 1990s at Borland International, a now-defunct software company that was located in California. Turpin managed a team of software developers, and Randolph worked in marketing, where he was an early pioneer in using direct mail and CD-ROMs to deliver software products to consumers. Randolph’s introduction to the internet stoked his interest in e-commerce.
“This skillset I had spent 20 years developing … all of a sudden there was this entirely new way to apply it,” Randolph said. “And even more exciting, there was this little company called Amazon that was in the business of selling books on the internet. I thought that was the coolest thing.”
Many people have the misconception that companies are founded based on an “epiphany,” that moment when the fog lifts and an idea for a business pops into your head. In reality, Randolph and his business partner Reed Hastings vetted hundreds of ideas before landing on the concept that eventually became Netflix – video rental by mail.
"The breakthrough for us was the DVD, because then, all of a sudden, there was this thin, light, inexpensive medium," Randolph said. "Streaming didn't happen until 10 years later."
The leadership team at Netflix knew that it was only a matter of time before the infrastructure was built that would allow viewers to stream or download movies, so they made a business decision to focus on bringing great stories to people, regardless of how the stories were delivered.
Finding a quick and easy way to stress test or “collide your idea with reality” is the best way to figure out if it has merit, Randolph said. He and Hastings sent a CD in the mail (DVDs were not readily available at the time) to Hastings’ home address. When the CD arrived 24 hours later for the price of a stamp, they knew their idea might work.
Because innovators must overcome numerous setbacks and failures, it’s critical for them to develop their resilience, Randolph said.
“It’s not about falling in love with your ideas. The thing I’ve trained myself to do is to fall in love with the problem,” Randolph said.
In 1981, Randolph graduated from Hamilton College in New York, where he started two clubs, founded a magazine and even produced a play. He told students that they would gain invaluable entrepreneurial skills by taking advantage of campus leadership opportunities and resources.
“You're doing … leadership, salesmanship, fundraising, resource allocation, but you’re doing it in this environment where if the total thing crashes and burns, you still have the cafeteria … and a roof over your head,” Randolph said.
During his career, which spans four decades, Randolph has founded or co-founded six other successful startups, mentored hundreds of early-stage entrepreneurs and invested in dozens of successful tech ventures. He lives in Santa Cruz, California, speaks all over the world and is an avid surfer.
“Entrepreneurship and innovation are so key to what we do,” said Mun Choi, UM System president and MU chancellor. “We want to see our students use the true power of their thinking in very unconventional and innovative ways to solve problems that they encounter.”