Netflix wasn’t always an entertainment behemoth. In 2000, it was an unprofitable startup offering DVD rentals via postal mail, challenging Blockbuster, whose ubiquitous stores were then a fixture of American life. Marc Randolph, who cofounded Netflix with Reed Hastings in 1997, this week recalled some key moments in the company’s history, in light of the company launching its website 25 years ago today. One of them: In 2000, the two tried to sell their startup to Blockbuster for $50 million.
They were flat-out rejected. John Antioco, CEO of Blockbuster, deemed Netflix a niche business and said “the dot-com hysteria is completely overblown,” according to a 2019 book Randolph wrote about Netflix’s beginnings. Antioco was right, of course, about the dot-com hysteria, as the subsequent bust demonstrated. And since Netflix was unprofitable at the time, $50 million might have sounded too high. Blockbuster executives “laughed us out of the room,” Randolph recalled on Twitter on Thursday. But now, “the company that once had 9,000 stores, is down to a single one,” he noted.
At Facebook, a similar refrain appeared in the “red book” of company values employees received around the time it reached a billion users in 2012: “If we don’t create the thing that kills Facebook, someone else will.” The late Clayton Christensen, author of the 1997 classic The Innovator’s Dilemma, described Netflix as a good example of disruptive innovation.
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