Netflix shouldn’t have survived.

In 1997, Blockbuster owned home entertainment—9,000 stores, a business fueled by late fees, and a brand that felt untouchable. Netflix was a scrappy DVD-by-mail experiment that almost sold itself off to stay alive.

So how did Netflix win?

In this conversation, Reed Hastings breaks down the behind-the-scenes decisions that helped the business thrive: the uncomfortable leadership choices, the culture blueprint that surprised corporate America, and a near-catastrophic misstep that could have blown the whole thing up.

Reed also talks about what shaped him long before Netflix: being a late-bloomer, teaching in the Peace Corps, learning humility from a former boss, and the painful management mistakes he made while building his first company.

This is a masterclass in: challenging the status quo, choosing a culture on purpose, and making big bets without pretending you’re always right.

What you’ll learn:

• Why Netflix’s early “obvious” advantages weren’t enough—and how close it came to dying
• The leadership lesson Reed learned from a CEO who was admirable… but strategically wrong
• Why Reed says the best companies are like championship sports teams: if you can’t perform at peak, leave
• The “keeper test” and how it changed corporate culture
• The Qwikster fiasco: what went wrong, and how Netflix moved to prevent future missteps
• Building a House of Cards: How Netflix made the leap to original content
• Reed on the media landscape: The remote-control moment of truth, rival streamers, and the rise of AI

Timestamps:

• 00:08:06 — “I was a late bloomer.” Reed on why no one saw greatness coming
• 00:09:30 — Peace Corps in Swaziland, and the moment he nearly quit
• 00:11:23 — An unforgettable lesson learned from the CEO who washed Reed’s coffee cups
• 00:14:39 — Building his first company in a cold cabin—no internet, just obsession and proof of concept
• 00:16:48 — Reed’s early struggles as a manager: “Too busy chopping wood to sharpen the axe.”
• 00:24:11 — Blockbuster’s late-fee pain and an early bet on DVDs
• 00:44:47 — The dot-com crash… and the $50M LVMH round that saved Netflix (barely)
• 00:47:12 — A possible Blockbuster buyout: “We probably would’ve taken any offer.”
• 00:56:18 — The Netflix culture deck: “We’re not a family,” and why that shook people up
• 01:05:07 — The Qwikster crisis, and the backlash that humbled Reed
• 01:19:33 — The competition: Netflix is just <10% of TV viewing—and the real threat is YouTube

Hey—want to be a guest on HIBT?

If you’re building a business, why not get advice from some of the greatest entrepreneurs on Earth?

Every Thursday on the HIBT Advice Line, a previous HIBT guest helps new entrepreneurs work through the challenges they’re facing right now. Advice that’s smart, actionable, and absolutely free.

Just call 1-800-433-1298, leave a message, and you may soon get guidance from someone who started where you did, and went on to build something massive.

So—give us a call. We can’t wait to hear what you’re working on.

This episode was produced and researched by Sam Paulson with music by Ramtin Arablouei. It was edited by Neva Grant. Our engineers were Patrick Murray and Robert Rodriguez.

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Plus, Jon’s take on why now is a good time to start a business — in spite of market uncertainty.

Today’s callers: Dan from Washington considers new offerings beyond his core loose leaf yerba mate product. Then, Mike from New Hampshire wants to expand his woodworking business beyond his basement, without taking on debt. And Maggie from Georgia wonders how to respond to rising customer acquisition costs for her soccer-themed dog brand.

Thank you to the founders of Heretic Yerba, MTS Woodworking, and Floofball for being a part of our show.

If you’d like to be featured on a future Advice Line episode, leave us a one-minute message that tells us about your business and a specific question you’d like answered. Send a voice memo to hibt@id.wondery.com or call 1-800-433-1298.

And be sure to listen to Betterment’s founding story as told by Jon on the show in 2018.

This episode was produced by Noor Gill with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Kwesi Lee.

You can follow HIBT on X & Instagram and sign up for Guy's free newsletter at guyraz.com and on Substack.

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

In the late 2000s, two French mountain athletes set out to build a running shoe that captured the feeling of flying.

Jean-Luc Diard and Nicolas “Nico” Mermoud had spent decades inside the innovation engine at Salomon—where product was obsession. In 2007, as Nico recovered from a brutal ultramarathon around Mont Blanc, the founders fixed on a problem that Big Footwear didn’t care about: downhill running was destroying bodies. Their solution: make the shoe bigger, softer, and shaped like a rocker.

At first, their prototypes looked like clown shoes. Runners who preferred minimalist footwear laughed at them. Retailers said no. But the founders kept doing the one thing that they knew could reverse things: they made people try them.

HOKA went from under $3M in sales in 2012 to more than $2B a year—and in this episode, you’ll hear how it happened: the risky design, the early cash crunch, and the strategic partnership that helped them win the U.S. market.

What you’ll learn:

• How to think of a shoe as a machine, not just a piece of apparel
• The go-to-market weapon that worked: relentless demo-ing
• Why outside money can’t always solve a cash flow bottleneck (and what does)
• How HOKA used performance proof to avoid being dismissed as a gimmick
• Why HOKA partnered with Deckers—and why it wasn’t just about capital
• How to keep a “rebel” mindset as competitors start copying you

Timestamps:

(Timecodes are approximate and may shift depending on platform.)

• [07:12] George Salomon’s leadership lesson: the CEO who sought advice from an intern
• [11:11] Nico’s first day at Salomon: testing ski prototypes on a glacier
• [18:42] The ultramarathon race where Nico’s legs crumbled (and why)
• [21:29] A breakthrough insight: performance changes with surface (leaves, lava, snow)
• [31:25] Designing a sneaker as if it were a car: engine, tires, seat
• [40:00] The “clown shoe” prototype—and the first successful run
• [47:22] Elite runners kickstart the brand
• [49:02] The hard part nobody glamorizes: factory minimums, bank demands, anemic cash flow
• [53:31] Deckers enters: the minority investment that unlocks the U.S. (without killing the brand)

Hey—want to be a guest on HIBT?

If you’re building a business, why not get advice from some of the greatest entrepreneurs on Earth?

Every Thursday on the HIBT Advice Line, a previous HIBT guest helps new entrepreneurs work through the challenges they’re facing right now. Advice that’s smart, actionable, and absolutely free.

Just call 1-800-433-1298, leave a message, and you may soon get guidance from someone who started where you did, and went on to build something massive.

So—give us a call. We can’t wait to hear what you’re working on.

***

This episode was produced and researched by Rommel Wood with music composed by Ramtin Arablouei.

It was edited by Neva Grant.

Our engineers were Patrick Murray and Kwesi Lee.

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.