This guy fascinates me. We talk to Netflix employees all the time and what we've found is that the entire company is geared towards driving the stock up. That's all well and good...to a point. But if there is one thing I've learned in the last 18 years hanging around growth technology companies, it's this: pay more attention to your business than to your stock price.
Employees need to be motivated every day. And if they're sitting around staring at the ticker, what are they NOT doing that some other upstart player in their market IS doing? A lot. Classic case of the hungry eating the young of the lazy and decadent. Happens all the time and is baffling. it's so easy to arrest this. CEOs should personally interview every employee up to the first 50 and should ingrain this concept into their heads: come here to WORK. Come here to get stuff done. Check your politics at the door and let's go build a huge company, hire a bunch of people and kick someone's ass every single day. Stock will reward us in time, and will be sustainable wealth.
One interesting thing to do is to watch the inevitable wall-hitting that occurs when companies go public. You can almost set your clock to it and they get crushed within 2 years as key people unload the stock and go cash in not just shares but resumes for bigger jobs they're usually unqualified for. Then a bunch of piled up work gets undone and BAM! You miss a quarter and are smoked. Analysts don't trust you anymore, investors are mad and dump you, etc. Hard to recover from this. In my view, it's all rooted in the go-go mentality of jacking up stock vs focusing on building a long term winner.
So Reed Hastings is the poster child of this mentality. Now that the stock has fallen back to earth and he's bounced around on strategy, making multiple public apologies (huge that a rock star CEO can admit when he screwed up but will it help?), alienated legions of customers, etc....what's next for Netflix? Watch for a huge brain drain out of the company and the beneficiaries will be the growing horde of digital media companies wanting to sell subscriptions to consumers for whatever. Too many of them to count, and a lot of Netflixers chomping at the bit to cash in those options and those resumes.
I am personally rooting for Mr. Hastings. I love what they did in general. A neat startup success story overall and good guy. But we'll see if that pro-stock-price culture becomes their undoing.
